How to LOSE Money on Every Job

In this video, I'm talking to a group of home service business owners and I got the lowest pricing I have ever got from a business. 3-man crew, $75 per hour, but includes the entire crew. We're gonna be talking about how to raise those prices and actually build a business that can scale instead of just adding a whole bunch of overhead expenses like an admin person and a crew manager when the business is only doing a few hundred thousand dollars in annual revenue. So if you're trying to go from $0 to $1 million, this is the episode for you. Lock in, get ready to take some notes. Here we go. Jack, go for it.

Hey, Mike. So this is our second year in business. We did about $150 grand last year in top line revenue at a 17% margin. This year, there was another guy in our town that was— he wasn't too sure where he wanted to take his business. He wasn't sure how to do the back end of things. That's where I mostly excel in with sales. He agreed to a salary and he brought his one employee over, a truck, and then his personal knowledge. And he is going to take over the foreman of our project crew, but he could also do mowing as well. Also, I have recently had good luck with a VA come on and the VA has taken over all of our administration stuff. My current struggle is every time I feel, every time I try to help what I think is helping them, like try to help them with their job or like step in and help for a day, I feel like I'm smothering what they're doing or I'm taking away from what their full potential is. So with our current revenue last year, we had a much smaller team. It was mostly me doing a lot of the work. Now going forward to this year where we have administration and then also foreman watching over the guys, where would be the best place to put myself to help the company grow the most?

So last year you did $100 grand. Is that correct?

$150,000.

Okay. And what do you think it's going to be this year? Like $300,000?

We just signed on an $80,000 client for a maintenance deal.

And so what do you think the revenues for 2026 is going to be?

I'm estimating between $300,000 and $400,000.

Okay. I think you're top heavy. You have an admin person, you have a foreman, and then you are not in the field.

Yeah.

So, yeah, like I— so if you look at the Copy and Paste Millionaire book, I talk about the working GM, i.e., the owner being in the field until they have 6 to 8 technicians and they're doing well over $500,000 annual revenue. The reason I say that is because if you take 5— if you take a business this year, it's going to be $300,000 to $400,000 and you take out one salary, yours, and an admin person, there's no more profit, especially because last year you did 17% of profit on $150,000. Adding more overhead, like, is going to be really tough. Either A, there's a pricing problem or there's an efficiency problem. What do you charge per hour right now?

Our hourly rate in '25 was very low. I think we were like $75 an hour for a 3-man crew. I was looking to build our customer base, which I did do. We started the year with zero customers and we ended the year with 150 customers.

Just to be clear, when you say $75 per hour for the 3-man crew, is that $75 per person or per— for the whole crew at $75 an hour?

For the whole crew. That's what I was charging. And then for labor and then materials were added on.

Okay. So I would, with great prejudice, highly recommend changing pricing because right now you're— correct me if I'm wrong, if I heard this wrong— are you charging $75 for an hour and that hour includes 3 people showing up to their property for an hour?

That does include that.

Yeah. Like there's no way in the world that will scale. None whatsoever. I'm not guessing on this one and I'm not saying this to be mean. I want you to win. You will lose money if you scale that, because if you just look at their hourly wage and the taxes on top of it, you're losing money.

Okay.

So you have made sense of it in the past at $150 grand, but you were out in the field working. But I will say this, you should be charging $75 an hour per person, not per— for a 3-man crew.

Okay.

And I understand it seems like, whoa, that's crazy. Every single day this happens. The reason I know this is because across 200+ locations, less than 10 charge less than $70 an hour. And they're all just getting started and they're trying to ramp up fast. Everyone else is $80 to $120 an hour per person.

Okay.

So I would, I would— before you scale, you got to nail it before you scale it, right? Like right now I want it to be when you go send a crew member out that's getting paid, let's call it $25 an hour. I want that to be no more than a third of what you're charging the customer per hour.

Okay.

So if you're going to pay them $25 an hour, by the time you include taxes and everything else, I got to be charging the customer $75 an hour per person.

Okay.

Does it make sense? I don't mean to be hard on you, Jack. I just, I just don't want you to get in a bad spot.

No, I definitely agree. When speaking with— okay, so I've spoke with Blue Collar Business Accelerators. They said the same thing, raise price on hourly man hour. What I found a struggle with is we have done that or we've been trying to implement that through January, but our conversion rate went down a lot.

And now to what?

I think we were converting 60% and now we're less than 20%.

So the only reason that someone says no to your price is because value is not higher than price. And so the easiest thing to do is lower price to make the job go through. The harder thing to do is increase value. So I would focus all my time and attention on increasing value, and that comes in the form of better website, better reviews. Like, how many reviews do you have on Google right now?

46.

And what's your website look like?

Greatgroundsoutdoor.com. We just put it live yesterday.

Oh, there it is. Cool. Got it. Cool. This looks pretty good. Great job. This will be better than— like, I'm assuming before this you didn't really have much of a website.

Yeah, not much.

Yeah. So this, this will be a big— this will be a big help this year for making sure that you actually can sell some services like— and this increases the trust that a customer has before they contact you. This is great. This is like, you can't see Great Grounds up here, so I'd change your logo to be black text up top here. But yeah, you got good reviews. So this will be really helpful. This is a step in the right direction, and that is focusing on value. Like, see, this is kind of tough. I can't read any of these links. These are all white. So little stuff like that we can shore up. Because this is the thing, when someone sees this, they're like, oh, if they're sloppy on their site, they'll be sloppy in person. And now they're willing to accept your offer, but only if you're the lowest bid. The only reason people do not accept your bid is because value is lower than price. What most people do is just lower price. I want you to focus on increasing value because right now you are probably in the bottom 10% of pricing.

I'd agree with that. Do you think there's a ticket number on a project or anything? Like, at what price point should we do onsite consultations? Okay, so over January, we were pushing for permanent LED and we can measure a roofline on Google. But it's over $5,000 on every house ticket price. So like, do you think over a certain number we should always be in person or what do you think on that?

In general, one-time projects I'm thinking about doing in person. If it's something I can do recurring though, which is like, for example, pressure washing, I can get them on an annual or a quarterly visit and do things like gutter cleaning. I still can do over the phone. The only time I really want to do in person is if I genuinely believe it's a one-time job. Because I need to make sure I make money on that first service. And yes, the bigger the one-time job, the more inclination I am to do an in-person visit because I've got to make sure I nail it.

I got you. Okay. So the foreman salary is $52,000.

Okay.

All of our guys are hourly between $15 and $17 an hour. The administration is $300 a week across. Do you think we could make that work or is that still too top-heavy?

In general, I think that is top-heavy because you getting out of the field at even $300,000 in revenues is not good. I always recommend getting over $500,000 before you start even thinking about getting off the truck. So I'd highly recommend looking at the Copy and Paste Millionaire book and like looking at where your metrics are. When you only have a few technicians and you have an admin and you out of the field, like the business almost will never make money. And that assumes the pricing is correct. I think the biggest problem right now is your pricing is so low you will lose money on every job you have this year if you keep the pricing the same.

In field, should I watch over them? Should I let them go? What do you think on that? The reason I brought the admin in is because sending quotes and sending invoices, I wasn't doing it timely enough. So a lot of customers were getting upset about that. Some customers left because of that. So she's in place to make sure our invoices get sent, our quotes get sent, and people get responded to in a timely manner.

If you read the book, you'll hear as you go into what I call a working GM, that's past $250,000, that's when I say yes, go get an admin. You're literally, like crossing that threshold this year. So you get an admin, great. But watch what I talk about in the book. You don't hand off operations, i.e., managing crew, managing the jobs and being out in the field until you're past $750,000 and getting close to that number.

So you recommend raising pricing as well as staying in the actual labor field with the guys this year to make sure—

Yes. The reason is because the difference between a business that makes $150,000 in profit with $400,000 in revenue and a business that does no No profit on $400,000 in revenue is the difference between the owner producing the extra $150,000 of revenue in the field. And so if you are saying it's a full-time job to do sales at a $300,000 or $400,000 business, then we have a really big problem around service area. We are serving way too far. We are doing all sorts of services that are taking way too long to do estimates. If you can't do multiple estimates like 5, 6, 7, 8, 10 a day, or it's too complicated, I would highly recommend saying, okay, from the morning until 3:00 PM, I'm doing out in the field with the crew, doing jobs every day, making money. Then from 3 till 6, my admin will schedule in up to 3 estimates in the evening that will be producing you out in the field $100,000+ in annual revenue, and that will be your profit at a $400,000 business. So if you don't do it, you'll basically break even or lose money. And then as for the salaried position, should he still be producing revenue like out in the field?

Yeah. Should he watch over projects and I should take over mowing or should—

At this size, there's no real watching over projects. There is, he's out on the project. Like he's a crew leader. He's doing the job though. Yeah. Yeah. 100%. He has to be, the expectation is he's producing revenue 99% of his day.

So working alongside, working alongside his two other landscapers.

100%. And you're going to do the same thing.

And do you think that what I'm paying him salary justifies his job or should it be lower or higher? What do you think on that?

Well, right now our pricing is so low that even if he worked full-time, if he's making $25 per budget hour on a 3-man crew, he's— you will lose money on him. That's why like we have to raise prices.

But if I'm charging $75 an hour, does he make sense?

Oh yeah, yeah. If you, if you can charge $75 an hour and he gets $50 grand a year, that's fine. As long as he produces like, let's call him 1,500 budget hours of work a, a, a year. If he can produce that at $75 an hour, he's making $120, $130,000 for of the business and you're paying him $50,000. Now all of a sudden, guess what? That hit the, like, about the 1/3 threshold we need.

Okay. And then I'm more focused on maintenance while he is working with the projects.

I'm fine with that.

Okay.

You got it. It's time to lock in before the spring rush. And when it comes to locking in, you want to be able to rely on something to hold your business strong, just like this chain. That's why at HomeWorks we have the logo of the chain because it's the 3 links in every home service business. Sales, operations, and admin. So before the spring rush gets super hot and you have leads coming in like crazy, make sure you're set up inside of a software like HomeWorks that can take your business to the next level and allow you to scale this spring. Go check out today. Go to home.works. Well, Lee is next up. Hi.

Okay. We talked about— we were on the— I don't even remember what call it was last week, I think, with you. Budgeted hours. I've been updating them all. So for aerating or like services over $1,000, let's say a service is $1,000, we would make $100 an hour for the company. So aerating doesn't take 10 hours.

Yep.

What do we do there?

Yeah, so what's nice about something like mowing, for example, is most of it is just labor revenue. You're not actually charging materials, supplies, there's no rental of equipment, there's no dump fees. And so that's what's so easy. You just take the dollar amount, divide it by your hourly rate. When it comes to treatments, whether it be chemicals, granular, aerations, I'm going to take a big chunk of that revenue and consider that not labor revenue. So, for example, on a $100, you know, or $1,000 core aeration, that's a big— mercy, that's a lot of core aeration. $1,000 core aeration, I might only assume that $300 of that is actually labor revenue. And so they'd have 3 hours for that job at $100 per hour.

Oh, okay.

So I would determine what percentage on treatments or core aeration do you want to consider as labor revenue out of every dollar. So for example, we do 50% at my location. So it's like, hey, if you, if you're going to do a $100 lawn and we're charging $100 an hour, one budget hour, cool. If you have a $100 treatment, immediately 50% of it's gone because it's not considered labor revenue. It's considered chemical costs for aerators. It's like either rental cost or equipment. Great. You're actually making $50 of labor revenue And I divide that to get 0.5 budget hours of budget hours in that case.

Okay, that makes sense.

Cool.

Thank you.

You got it. Eddie's up next.

Hey, Mike, I got a couple rapid-fire questions for you. We did $300,000 in sales last year, shooting for $500,000 like we spoke about last week. I know you believe in open-book management. I want to know if I'm at a point where I think I can start profit sharing for the employees. And if so, how much?

Yes. If you're going from $300,000 to $500,000, a lot of times that's— that rapid growth will cause to not have a lot of profits. And so what you want to be careful of is doing profit sharing and presenting to the team in a way that's like, guys, this is great. And they're like, they don't see anything for 12 months. For a crew member, they can't think past this quarter. You're like, we're going to do quarterly profit sharing, don't worry. And like, you get in the spring rush and you double the number of recurring clients, you buy a couple of trucks, like Immediately that money's gone. And so they will just think you're a scam artist. I would open up the books, say, hey guys, down the road when we are profitable, we're gonna offer this amount as profit sharing. Right now, I'm opening the books, you can see the fact. You're not gonna say this part, this is what you're thinking. I'm gonna prove to you all that like, I'm not making money hand over fist, I'm putting all the money back into the business. I would still offer it, it's how you present it, Eddie. So I would make the profit sharing, but I'd make it very clear like, hey, right now we are investing back into this business. There's not gonna be a lot of profits, but I wanna make sure this program is installed that when we make more money, we're all sharing in the, in the benefits of that.

Yeah.

And they all could hold me accountable too.

Yeah. They're going to be asking for it.

Okay. Would you pay out your landscapers and your lawn service workers the same, or would you scale them differently? The landscape projects, they make more money. They're higher valued projects. Is everybody on the same playing field?

I'm assuming, is it way more skilled labor?

It's harder work, I think.

Yeah. Like I would adjust that at the pay for performance or like hourly level, like they make more money on a wage basis because they have higher skills. They do more, you know, different type of labor. I would not change on the profit sharing because now you've created like tiers of who's better than someone. So I'd make sense. I'd make more of the end of like the daily, weekly, the monthly pay compensation based upon service if it's that much harder. And then I would do the profit sharing because the whole objective of profit sharing is we all think like a team. We all make a cut of the profits. I, I would keep that the same, but then change the, the wages, whether it be you're doing hourly or pay for performance, that I would adjust that.

That's kind of how I've done it. So that's good to hear. I know someone who doesn't charge for a weekly cut. He charges a monthly price to the customer, and even in the summertime, if it's hot and dry, doesn't need to be cut, he still gets paid for that because he charges monthly rather than per cut. Do you like that model or would you stick per cut?

I always think of being growth mode or profit mode, and that decision for most markets is a profit mode strategy because it helps you, it helps your cash flow. Most of the time, most markets aren't used to that pricing. And so you're going to create friction on the upfront sales process when you add that as a requirement.

Yeah.

And so there's two ways to tackle this. One is some people will get people in at a per cut price and then convert them, i.e., upsell them into a recurring model and say, hey, look, you save money or you get this extra service if you do this subscription-based thing and look at it more as an upsell so that way they reduce the friction on the upfront, but then they still can get the cash flow benefits. Other people, and this is the easiest, most growth-prone strategy, is you sell them what they're wanting, which is per cut, 'cause that's what's common, that's what, it's easy and low friction, and you do it over the phone or instant quotes. And then I just upsell them a whole bunch of other stuff periodically throughout the year and increase their annual value. Annual customer value. The thing you want to be careful of with the subscription model is, yes, you are going to make more money when you're doing less services. You're also going to lose more money when you're doing more services. And so sometimes this can actually really hurt your cash flow because when you need the money the most, which is in the spring rush and you're getting leads pouring in, is actually when you're making no, if not negative profit according across the whole year. So sometimes people are like, it's good for cash flow. Like, no, you just move the money. You didn't make any more money. You just moved it to the time of the year when you make less. But the time when you would usually be making more, you're also making less.

Understood. Any tips for finding a new employee?

Right now it is, in my opinion, especially with the labor market the way it's going, I think it's going to be pretty easy to find technicians in terms of volume of candidates. It's going to be more a matter of who can screen them down and find the best ones without going through 50 interviews. And so I am a huge proponent of what I talk about in the book, and that is video applications. So you get them in through Indeed, you get 50 people, they're all—

they—

in Indeed you can create automations or you can even— you can connect it up to HomeWorks if you wanted. But like technically you could just do it in Indeed. When someone applies, they get a text message and that text message is going to push them to do a video application. So that way, instead of 50 applicants that you're screening through, looking through their resumes, calling 20 of them, setting up interviews, 3 of them show up. I'm trying to get it to where I get to those 3 people just immediately. I only interview the 3 people.

Got it.

Okay.

All right. Thank you, Mike. I will hold you up.

You got it. Next up is Fares. I'm going to guess it's Fares.

Fares.

Fares. Okay. Very good.

So I just signed on with Copilot. I haven't even done my onboarding yet, but, but I'm very, very small. I, but I have a decent size on the lawn base. That's why I signed up with Copilot. And maybe one or two guys throughout the year that help me take care of all that. But I want to try to land more of a little bit bigger jobs, more landscaping jobs, while also growing the lawns, but maybe having one or two guys take care of them completely. And I want to try to stay on the bigger jobs with another guy or two, and that's part of the reason I signed with Copilot. But I'm not sure what the best way to, you know, to grow from something as little as 105 or 120 and land some of these bigger jobs and stay consistent with work and be able to give enough work for everybody while also growing. So, so I don't know what your opinion on that would be.

So ultimately, when we look at the constraints of growth in a business, there's only 4 things: liquidity, leads, labor, or leadership. Based on what I'm hearing, you believe you have a leads constraint. In other words, I need more customers. Now you're also adjusting one qualifier, and that is you want different types of leads. You want bigger projects. Those are two different problems. Number one, how do we get more leads? Number two, how do I get the leads I want? So let's attack the second one. If you want to change the type of leads you get, you change your brand. So on your website, you show projects. On your marketing, you show projects. When you do advertising, you show projects. I was talking to a business owner we were doing a turnaround for, and he does like huge commercial projects and does residential, high-end, very luxury out in Dallas. He wants to go more the residential side so he can get more of the recurring maintenance after the project. But the problem is when you go to his website, you see these huge commercial buildings and projects that looks everything to do with commercial. I asked him, how many leads have you ever got for a commercial job through your website? He said zero. Why? Because they all just contractors that are coming to him no matter what. They have a cell phone number. I said, the only reason your website exists is for the consumer. And so you've got to change it to where you see a house and you see someone's backyard. Then they will assimilate the fact that that is for them. And so if you want to change the type of leads, you have to change your branding. And then if you want more leads, you just either A, do more of what you're currently doing because you're getting leads somehow, or you've got to figure out a channel in order to be able to advertise to bring those leads in. So which of those two is the biggest problem, the type of leads you're getting or getting more of them?

Yeah, I think it's a little bit of both, but, but maybe mostly just, just getting leads because I have tried some things like pay for leads. But I've always been stuck in a little bit of a middle spot because I, I never did a lot of advertising. I was still used to working, almost working every day, but not that many hours because I was in school. So I don't have a lot of like a, like a big website. I don't— I need to set up something like a website. I did some of the pay-for-leads through Angie and, and things like that, but, but for the most part, I had gotten all my work through word-of-mouth until now where I'd like to be even more busy.

Ultimately, as people talk to each other less, it'll become more and more important to make sure that you show up when they ask Google or ChatGPT who's the lawn service or the service that you provide in their area. Before you spend a dollar on marketing, I'm going to make sure your website's solid so it increases the conversion rate and the percentage of people that show up to that website actually become leads. So it's the first place I would spend money. But before you do that, I would go make sure the free things are done. For example, I would assume your Google Business listing, do you have an address verified or not? Just a service area?

No, no, just a service area.

So I'd be verifying the address. I don't care if you got to go do service for free for someone to verify a commercial address, park your truck in front of there, put a sign out front, whatever you got to do. Then I'd get at least 30 Google reviews. If you did that, you would double the amount of leads you get just by doing those two things. I would also make sure I'm posting at least once a week to that Google Business listing with pictures and video. I would answer every question it has about your business, and I would make sure I respond to every review by going to ChatGPT or Gemini and pasting the review in and asking it, please give me an AEO— it's answer engine optimization— and SEO— search engine optimization— response for this review. Copy that, put it into your review response, and give that to every single review that comes in. I don't care if it's friends, family, people have done service for in the past. You need at least 30. If you did all of those things, you would double the amount of leads you get easily., and then you go to something more paid. But before you spend a single dollar on Angie, you're going to make sure your website's solid so that when leads show up at your doorstep from Google, they actually convert to something. Thank you. I appreciate it. You got it. I'm just questioning the meaning of money because I have so many new leads and making so much money from my new website, from Home Service Web Design. That's right. The average customer that joins Home Service Web Design or Lawn Care Web Design increases the amount of leads they get by 80% within the first year. So go check it out today. You also book a call with our team for free and get 15 minutes of consultation about your website and how you can improve it by going to homeservicewebdesign.com/call. We'll see you there.

Carter's next up. Perfect. I did about $100,000 in revenue by myself last season, and we'll be looking to add another full-time employee with me this year and then probably a helper as school gets out. My first question is just about payroll and what— I mean, I have, I have QuickBooks. I'm integrated with Copilot and everything like that. But is QuickBooks a good way to run payroll or do you guys use something else or is there something else that you would recommend to run payroll for those employees?

QuickBooks is great mostly because that way when you're doing bookkeeping, it already breaks out the taxes and any deductions from their paycheck. It's all in one spot and it already knows which employee it's coming from. That makes it a little easier. Gusto is probably the easiest in terms of user experience, in my opinion. And both of them are relatively the same cost. But I think if you're used to QuickBooks, you're doing your bookkeeping there, I would just go ahead and just run QuickBooks to, you know, payroll through there.

Sounds good.

And I figured that was the answer you had, but I figured I'd ask. The other question I had is I have 30-ish Google reviews on my Google Business page and All of them are 5 stars. I had one guy last year who basically dropped me a 1-star review without even contacting me about it. And I didn't know if there was a way that, you know, you would recommend handling that or anything. Like, I left him a response, but there's not really— I don't know if I just have to live with that, or is there a way that you would recommend trying to tackle that?

Yeah, 1-star is the best because they're the things that people actually read, right? Yeah. So what you want to do is make sure that your response has nothing to do with him, has everything to do with the people that are going to look at that review. And so the best 1-star reviews are when people say you're too expensive or some crazy thing and you've never done service for them. Yeah, because then every high-value client that sees that 1-star review is like, oh, disqualified that because they never even did service for them. I'm not price sensitive, so I don't care about price. Oh, and by the way, they respond in a really professional manner. Yeah.

So I guess if I wanted to go dive more deep into it, basically he claimed that I did damage to his property and refused to pay for it, which the damage was, in my opinion and other professionals in my area, normal wear and tear on the property for having a lawn service there. And he wasn't having it and basically wanted me to pay thousands of dollars to replace his whatever basketball hoop and fence and siding and things like that. So there was It was, it was, there was definitely things that we could have worked out as of me replacing stuff like that, but he decided to just leave it on my page. So I didn't know if, you know, there's a way that I guess I could respond better. What's the name of your business? Uh, Take Down Lawn Care, LLC. In Fargo, North Dakota.

All right. Take Down Lawn Care. There it is.

Mr. Brad. Yeah. My best buddy, Brad.

I could do the question, how I run my business. Okay, so this one you're going after a personal attack. I would leave that alone. Correct. Yeah. Okay. Yeah. Okay. Yeah. Like you're getting personal here. Again, this has nothing to do with the customer. It has everything to do with the response of other people. So for example, is this a cover around this like a mailbox?

It's around his basketball hoop.

Okay. Oh, mercy. Okay. Oh, mercy. Okay. Yeah. Yeah. Like I think anyone—

what's that? It's a down— it's a prop up for a downspout, basically. It's a little plastic thing.

Cool.

We'll get a new one of those. Yeah.

On all of these things, like, that wasn't me.

This is 2 months ago. Like, I'm assuming this person, like, he's— this is irreconcilable. Like, you're not even in contact with him. Yeah.

Like, it was— I offered to say, okay, well, like, not even those tire marks on the fence weren't me. I had only serviced his property a handful of times. Before this had happened, and 99% of all this damage was from the previous company that he had out there.

Yeah. Again, like, customer, I don't care. That's because this customer is never going to hire you again. This is about the people in the future. I would go get a gallon or get a quart of white paint. I would get that little plastic fixer thing. You're going to spend $20 and 30 minutes to go over there. You're going to paint the white on the fence. You're going to replace the downspout, and then you change your review to be like, hey, I came back and painted the fence. I replaced the thing that we broke or someone broke on the thing. And the other stuff, it looks like could be washed off. Please reach out to us if you need help with this. We do think it might have been from the service before us because I do have documentation of it. However, I want to make sure you're satisfied. Like that will be the response you want to have for that review.

Okay, gotcha. I'll change that. And I appreciate that. And that was, that was the thing I mostly wanted to ask you about on here is just how to try and be professional.

So yeah, cool. Perfect. Help with— help you with this too. Yeah, I'm sure. Kosher. Let's go. Cool. All right. Swift Edge Lawn Care.

Hey Mike, Sebastian here, and I have just a couple questions for you. Really just want to kind of get your thoughts on hiring before or after, um, I have the workload. I'm confident that I can get the leads, but I'm concerned that I'm going to hire too soon, then I'm concerned that I'm going to wait too long, uh, when the busy season gets here. So I just want to kind of get your thoughts on that, man. What do you think? Hiring before or after we have the work to actually support the employee?

Well, it really comes down to knowing how many customers you can drive using your marketing budget. When you say, hey, I anticipate all this demand, it's like, should I go get labor so that when the demand comes, I have— I can serve them? Or do I wait for the leads to come in and the customers to sign up, and then I go get the labor? So there's two things that hinges on your confidence level in hiring laborers or your confidence level in getting the leads. Which right now do you feel like if tomorrow I need to get more leads, is that easier? Or if I need customers or employees tomorrow, which one's easier?

Yeah, it's easier for me to get leads, I feel like, than it is for me to get an employee in my, in my mind.

Okay.

That's okay.

In your mind, a personal thing, right?

Okay. From, from a numbers perspective, do you know what your customer acquisition cost is?

I do not. We have a lot of word of mouth at this time. We have a list of emails that blast when we want to, you know, acquire more work. And so that's why I feel confident that I can get the workload, at least while we get additional new customers on a recurring basis. All of our stuff is lawn maintenance.

So hiring people before you need them, in other words, creates excess capacity. Have you read— have you read the book, Sebastian? I have not. Okay. So in there we talk about capacity. So there's labor capacity, there is asset capacity. Asset capacity being how many, how much revenue you can do with the trucks that you have. Labor capacity is how much revenue you can produce with the employees that you have. If you go hire more laborers without increasing your revenue by a bunch today, you will increase your increasing your labor capacity and you're creating excess capacity between what you're doing in revenue and what you could be doing with your current employees. Excess capacity eats your profit margins for lunch. Now, if you're telling me I'm confident I can increase my workflow though, because I can get these leads, then it becomes your confidence level in doing that. Word of mouth you can't control. You can't go turn on the gasket of word of mouth. Yes, you can get upsells, big fan, but are you going to be able to double or triple your amount of revenue based on upsells? Maybe not. And so I would really try to, before I ever create excess capacity, I'd have to be very, very confident that I can go spend money to buy customers as fast as possible to reduce the excess capacity, i.e., get more customers. And so if you don't know your cost per lead, your customer acquisition cost, and your retention, I'm never going to create excess capacity for the sheer fun of it. Now, what's really crazy when people say I'm going to buy a truck because I'm going to have more work, because you go buy a truck tomorrow, right? What this really comes down to, what I would focus on, Sebastian, is your level of confidence in getting more employees up to speed. Because if you know you can do that reliably, you won't have to go get them months in advance of having the customers. I hear you. So I would actually create a system for hiring, onboarding, and training that you can reliably get someone up to speed within 1 or 2 weeks. Have a bench of people that you already have interviewed that are great candidates that you know if you needed them, you could contact them and get them up. 1 out of 3 of them will accept a job offer because that's another thing. You don't have to go way above capacity.

Tell me more about that. When you are creating a list of potential hires, you know, and you don't need them for another month, 60 days down the road, what makes you think that it's okay to have or contact those again? What if they already got a job? And see, this is my, this is my lack of confidence, right? And this is why I'm asking these questions.

You're totally good. Yeah. So like the higher compensated person, the longer they're willing to wait. So for example, we just did a national campaign at Augusta. We got almost 2,000 applications and we narrowed that down to 50 top candidates across the country. Most of those people will be hired over the next 12 to 24 months, but they're general managers. Now when it comes to technicians, they— a great technician is likely going to get a job within 7 to 14 days, right? In most markets. Yeah. That being said, if you're able to compensate them very well using something like pay for performance, you have open book management, you have better benefits, they will leave another job also for $3, $4, $5 more per hour. And so this is why the business model and being profitable is so important, because if you're profitable, you can make sure you make the $3 or $4 or $5 more per hour for them, be able to compensate them better so they will leave the job and come back to you. And just making sure that your job ad, the posting is very clear that, hey, We don't have a job in the immediate future, but within the next 6 to 8 weeks, we expect to be able to have 2 open, open positions. And if you'd like to apply for that, there it is. Like, and then that way you can interview them, you can make sure they're good. But you say, hey, just so we're clear, April 1st is when we're thinking we'll be needing a person. And some people will drop out like, sorry. Other people, they'll be like, oh, that's perfect. My other job ends end of March. That'd be, that'd be fantastic. And if I got to wait 1 or 2 weeks into April, that's okay.

Awesome. Yep.

So start there. Perfect. You won't have to worry about, oh, I've got to hire people way in advance because then you're going to burn through all of your cash by having them do nothing, burning time, being inefficient. Go ahead.

Right.

I don't want them just cleaning the shop. Basically, big goal for us this year is farming neighborhoods that we're already fairly established in. Any ideas on how to tackle that? First step, second step, if you don't mind sharing some ideas on that, please.

Do you— are you allowed to door knock in that, in that market or not?

Yes.

A couple of neighborhoods, there are no HOAs established, just nice neighborhoods.

When you boil the puddle, it's easy from a budget perspective to boil the puddle, right? So if there's a couple thousand houses, you could literally do something as inefficient and horrible as every door direct mail, which I don't recommend for getting new customers. But when you take 2,000 people, houses, for example, That means that for, for $1,000, you can hit all those houses. So if I spent $2,000, I get 2 mailers inside their mailbox. I then put door hangers on all their doors. I put yard signs at every single 4-way stop around that area. And all of a sudden you boil the puddle, right? So that's what I'd be focused on. I think for under $5,000 or $10,000, you can hit all those customers many, many times and get extreme density. That's like for Augusta, we have 5-mile radiuses for our territories. And when they come to train, we say focus on your 1-mile radius. 'Cause you can boil that puddle and get way better density and get to profitability much faster and then use that profit to expand outside of that if you want.

Right. Okay. So just hit 'em with different sources.

Gotcha. Boil, boil the puddle, baby.

Let's go. Beautiful.

Thanks, Mike. You got it.

Malia's next up. For websites, um, we have a website through Voncarr Media. How often do we update or should we just leave it how it is?

Yeah, like, great question. So I would say this, I usually recommend at least once a year change it, mostly off-season and like your on-season. And so don't be having a picture or video of you mowing in the middle of winter when you're doing only cleanups or snow, right? I would just have it work on a reminder on your calendar. You say, hey, here's some updated photos for snowplowing, property clips, whatever. Just make sure the picture and the video look like the current season. I would do it at least once a year.

Okay.

Yes, we do Christmas lights in the offseason pretty much. I was talking to Tori. I think that's the same. Yeah. Of actually getting another website for our holiday lighting so that could— because I know if we had like its own separate thing, we would rank higher in like Google and because it's already its own separate thing, we just kind of combine it a little.

What percentage of revenue is Christmas lights for the whole company?

It did $84,000 this year, almost $85,000. And what's total revenue?

For everything, it was like whatever, $164 plus whatever number you just said was like, okay, so about a third.

So about a third of revenue is coming from, from the Christmas lights. In terms of cost, I would probably just keep it as one for now. I would make a different page. So like yourservice.com/christmaslights, for example. Like, do you have a different service page for it right now? Like a Google page or no, no, on your website?

No, it's just a tab. I'm pretty sure like it's under It's on the home screen.

It's two separate business. We've separated the businesses because we target— oh, you have? Yeah, because we don't target Clarksville, we target more Nashville.

Ah, so you have different service areas. Okay, in that case you might want to.

Yeah, okay, our service area for Christmas lights is a lot bigger.

Got it. What you could do though is you could just keep it— keep your current Google listing and then change your service areas for when it gets to the Christmas light season and then change it back once you hit spring. You'd also change the name of the business as long as it's in your LLC name. Like you have a DBA with the Christmas light thing. You could change it in your Google listing to like whatever, whatever, and Christmas lights. So Augusta will do this a lot. We don't want to have— some of our owners don't want to manage two accounts. And so what they'll do is Augusta Lawn Care of Athens during most of the season and Augusta Lawn Care and Lights of Athens like during the holiday season, right? Just know whenever you change your address, service area, or your name of your business on Google, you'll probably have to reverify. But as long as you have a solid address to reverify, it's not a big deal. But it's going to be the simplest because if you're going to, if you're going to create two Google listings, two websites, you're going to have to maintain them. Otherwise they just become like useless.

Yeah. Yeah, that is true.

Yeah.

I mean, we do already have two listings, two websites.

Yeah.

Two Google profiles, two websites, two of everything, pretty much.

Yeah. Like, I'm just concerned about doing the $80 grand for a whole new website, right? Whole new website, all this other separation. It's $80 grand, right? I would rather just focus on let's grow the top line revenue of this whole company to $500,000 plus by everything being separate for $80 grand. Like, I wouldn't do that. It's just too small. Is it a third of the business? Yes. But like, are you going to build a million-dollar business that also has $500,000 of lights? Probably not. The other side is probably going to scale faster. And so I would probably, for the sake of simplicity and focus, probably keep it one. But if you're saying it's completely different service areas and you have different names for the companies right now, what's the name of your lawn care business?

AG Mowing.

And then it's AG Holiday Lighting.

Oh, no. Yeah, just do one site that we can do. You can do AG Lawn Care and Holiday Lighting on your Google listing and then aglawncare.com/holidaylighting would be a service page inside that website. You save, you save money on the website, you save less hassle with doing two different Google listings, and you can always change your service area and the name of the business come season, like, you know, September, October, if you want, on Google. Okay, that way too, all your reviews are going in one spot. It'd be different if you're doing 500,000. If you're doing 500,000 Christmas lights, it's like, it's, it's its own business.

That's the goal.

But I feel like that's going to be very doable. Okay, yeah, hey, then, then that's fine. Just know that right now you're probably spending $5,000 to $10,000 extra a year by having them separated. Which is a big cost on $80 grand. If you're like, no, we're going to 5x it, then yes, you're paying, you know, cost right now of having a different website, maintaining a different Google listing. And I'm okay with that. But you're going to have to grow that sector of the business to make it worth it.

Okay.

Yeah. For the address that we have for our mowing company, it's like pretty much in an area we don't target, but we do get leads from there. Do we just keep that? We pretty much put the address there to have an address on our Google page, but our crew doesn't go there.

None of the equipment is there. It's just an office space. We only have it on Google to—

yeah, is it central? Is it central to your market, your service area? No. So like, I'm always trying to get my address verified inside of my service area and ideally inside the same city that like is in my name. So for example, like if you— when we do Augusta, like in like slash Athens, I want the verified address inside of Athens. Right? I would do whatever I could to try to get that more central to your service area, because if it's even 10 miles out, like, how far away from the center of your service area you think? Like 5, right outside of it. When you search your service area name and like lawn care, do you show up on the map or not?

We do.

I mean, it's still in Clarksville. Okay, Clarksville, Tennessee. Tennessee lawn care. Oh, AG Mowing, let's go! Wow, it's way out there though. Wow, you're right. You're right up against Kentucky.

Let's go.

Yeah, we want to target like the single because that's like the nice homes and Adams.

So I'll say this, like, what's the— what's your URL right now? Oh, AGMillion.com. There it is. Got it. When did we build the site for you?

Do you know? A year and a half ago.

Okay.

How many reviews do you have?

78. Oh, you got 140, 137, 174. Yeah, man, if you need that a little closer, if you could get an address more verified closer to Clarksville, it would help, but I wouldn't like bend over backwards to get a long-term lease. But if you get a commercial customer, hey, can we verify your address and be more towards, I don't know, I don't know, just, just 5 miles closer to the center there, you'd probably— it would probably improve your ranking because there's really no reason outside of that why you can't beat some of these other players. Like, for example, Mullins Law Enforcement doesn't have his HTTPS. Which is like his SSL on his website. That should be an easy one to knock off, as well as markslawnservice.net. Like, it's a.net, for crying out loud. But the thing is, they're right close downtown. It's like they're ranking better because of that. So just if you can get— if you give someone free service for the month, be like, hey, can we just verify your address? Like, I would try to do it if you can.

So you're saying we should go like downtown Clarksville?

Whatever is closest to the center of Clarksville.

Yeah. Okay. Because we try to go—

not your service area is more north. No, it's more south towards the—

oh, really? And not downtown Clarksville. Yeah, it's closer to the interstate.

Got it. So somewhere between downtown there is probably where I'd be trying to verify, right? Because to Google, like, Clarksville is that city. And I want to— I just want to show Google I'm the top for Clarksville. If it so happens that you're on the south side, great. But like, we're definitely going to be better than where we're at now because you're on the most north side. You're almost in Kentucky, right? So I would try to do that. But are you guys on Google Local Service or LSA right now? Like local services ads? Not currently, no. Cool. So go ahead and get verified for that. You don't even have to put a budget, put like $10 a week to it. I don't care. Just get verified because that alone gives confidence to Google that you're actually legit and that will help you vicariously on search. And on the Google listings. Good job putting photos on AG Mowing. That's good. You're not responding to reviews. Oh, you are. A year ago. Do you all usually respond to your reviews? Yeah, I think. Yeah. So I would do those two things. I would just make sure that I get closer to Clarksville on the south side or somewhere close there. It's going to help a lot. And then I'd get, I'd get, I'd get verified on Local Services Ads, LSA. That alone will help a lot just because like you think about Google as a business, it's like if you use their products and services, they want to promote you. And the guys in front of you on, on search right now are pretty easy to knock off because their sites stink, but they've been around a long time and they're closer to Clarksville.

Yeah.

So when you say get verified with local service ads, like we've done them before, we just currently don't have it like active.

So just turn on, just turn on really low budget so that way it's actually, you're running LSA, but it's mostly a matter of them knowing that that you're— it's like pay to play, honestly. And, you know, I don't even need the, the ads from LSA. I want the validation to Google that, like, you have verified accounts, you have, you have insurance, you have everything set up correctly.

Okay, should we just keep it running, like, forever at a low?

I would. Yep. Good stuff. Well, thank you all for being here. I really appreciate it. Love you all. Hope you have a fantastic weekend. We'll see you guys.