How to Standardize Pricing When Every Job Is Different | Q&A

In this video, I'm coaching 10 home service business owners that are trying to build a million dollar business. We're going to talk about pay for performance, how you can pay your employees not an hourly, but based on how hard they work. We're going to be talking about getting off of the truck and focusing on sales and working on the business. And we're even going to talk about doing multiple locations and how to pay a general manager. This is a great episode. It's a long one, but it's full of golden nuggets. Without any further delay, let's roll the tape. Ian, you're up.

Going on guys. Thanks for having me on. Appreciate it. Appreciate everything you do. First question I have on the list is regarding P4P. So currently we're doing like a half baked P4P system. Haven't switched it over yet because I think my pricing slash estimation process is kind of finicky, super inconsistent. I've been doing budgeted hours for a little over a year and there's just a lot of variability. We do tree work. Like every tree is different, every tree location is different. I'm just wondering if you have any recommendations on a like pricing matrix for. I don't want to say complex jobs, but jobs that have a lot of variability to them.

Yeah. So when you, when you have variability around budget hours, let's assume you have like it is a 10 budget hour job. Give me a range as to how long that would take. Are you saying sometimes they get done in three and sometimes it takes them 20?

Yeah. I mean, and I think a lot of that is not their fault, but it's more my fault based on just the, the estimating, you know, unforeseen weather events or we can't get a chipper into the backyard so we have to drag everything out to the front. It takes twice as long. So there's just a lot of. Either I'm doing the quotes too fast and not taking into consideration all the variables or, or they knock it out way faster than I think.

And yeah, so there's two ways to look at this, Ian. One is so first off, when I do, when I talk about P4P, I always say you have to be accurate in your estimating. If you're not, it does get really, really hard from a cultural perspective to keep guys headed in the game. When you budgeted 10 hours and they're 40 hours deep on a project.

Right.

It's just very difficult. And so if you can't get accurate estimates, there's two things I would think about 1. If that inaccurate estimate is usually a specific type of tree service, I would try to cut that service. So for example, I've seen this a lot of times with people in tree service that are doing P4P. They'll cut hazard trees. They're like, hey, it makes a bunch of money. But also there's sometimes I lose my shirt on the thing. Great, let's get rid of it because we already know we can't standardize it, we can't systematize this thing. It's not simple. And if my, my, if I lose my shirt or I make a gajillion dollars, let's just say we don't do it and we'll be right in the middle. And so I would first say if it's a lot of times 20% of your services are causing 80% of these, this variability. And so I'd first look at what kind of jobs are causing this problem and try to eliminate that would almost, almost always fixes the problem. Second thing I would say if you're like, well we actually specialize in hazardous trees and like that's where we make all of our money, then it's a function of explaining to your team like, hey guys, there's going to be jobs, we crush it and I'm not going to hold anything back on people. You're getting the percent and you're going to make a bunch of money. And there's going to be other times where I mess up because like, you guys know it's so hard for me to estimate these, to know what's underneath the ground or what we're going to cut into. As long as you're honest with them and I think as an aggregate you're accurate. So for example, 10 jobs over the course of 10 jobs, you can't be off by 50%. One job might be up down 30%, 20%, 50%. But over the course of a several weeks there needs to be some consistency and the longer your pay period, the less that will matter. One job going off or going way quick. I would much more look at an aggregate in a longer form, two weeks, four weeks, and making sure you're accurate in that manner. And if, if you are, then I would just make sure you explain things to them really, really in depth and then have some sort of asterisk probably around something like hey, if it goes over like three to X, I'm stepping in and, and if it's my fault and doing this, then I'll step in and I will make sure Everyone gets base pay extra or something like that on the job.

Gotcha. Yeah, perfect. Thank you.

But almost all the time I was talking to an H VAC company today and they realized once they did this that literally 70% of their jobs that went over budget hours was one service. So they cut that one service, which was about 13% of revenue, and then they were able to do P4P with a ton of accuracy.

Gotcha. Yeah. Perfect. Thanks, sir.

You got it. Eric is up. Go ahead, brother.

So we're a relatively new company.

We've been in business for about the last three weeks. Everything's going super great off the start. We've been doing a lot of instant price door hangers, but we want to start thinking about how to get some more of like natural leads coming in. So it's one of your recommendations are for helping get our websites start listing higher so people can just like naturally find us. And then when you think it would be a smart idea to start doing like Google Ads or Facebook ads.

Yes. The vast majority of your leads in your first year are going to come from paid traffic, whether it be online or from direct response marketing. Like direct response marketing is what I would recommend you do because branding will come as a result of boiling the puddle in these small markets. So whether it be a neighborhood that sees a door hanger multiple times or sees a Facebook ad and a goo, like the more you want to, you want to bottle the boil the puddle like these small markets that you're trying to go into. I will also say personally, if I was consistently getting one out of 100 for door hangers, I would not go into to Facebook and Google. Also, I'm making an assumption you can deliver about 80 to 100 of them an hour. Is that about correct?

Yeah. So I got me and my business partner right now, we actually were doing some before this, ready, some after this, and I think we got out do like 150 an hour, maybe a little bit more than that with the two of us.

So if you paid someone, let's just, let's assume they're not as good as you. They're going to do 100 an hour. That's one hour of labor. And printing costs, you're probably looking at 30 to $40 customer acquisition cost. Because remember, when you get a quote lead from an instant quote door hanger, it's a customer. So I would, I would just keep plowing money into that. Like, honestly, you're not going to go into Facebook or Google as a newbie and, and get better returns. In that. Can you dabble it? Can you test it? Sure, go for it. But like I would say, if it's working, just keep refining it. Because I think that if you just kept refining it, you'd create a system for people to go do them for you so you can scale it. Because right now it's not scalable. Door hangers eventually get enough customers, you've got to go actually do the work. Like, it's tough, but I believe I would just create a system around that and make sure you can scale it. And so getting team members, training them on how to do door hangers, giving them incentive program around delivery, getting them on a watch so that you can track and make sure they actually deliver them, then dumping them in a garbage can, do that. Because at 30 to 40 bucks a customer, I would be all over this. All right, thanks, Mike. Yep, you got it. Marco, you're up.

So I own a long hair company in Canada, in Ontario. I wanted to talk about the gm. So we decided to have one location and grow. Because we're very isolated. We're split between about 40% lawns, 35% being large projects, predominantly sod, and then 25% is small projects where we do like stumps and hedge trimming, tree trimming. We kind of separated that. Next summer, we're kind of shifting stuff around. So I'll talk about this summer where we had a office manager, we had a salesman, and we just hired a mechanic. And then there's me. Now the problem is we didn't have a GM quote, unquote. So we all shared that role. And it was kind of getting to the point, like, who does what. So then I really wanted to hire a operation manager to kind of replace kind of all of us. As we grow, sales will grow. There's the salesman's only doing sales, office only doing office. And then I got operation manager. But I feel like we have a lot of complex services. So instead of hiring one general manager to say, I was thinking of running three separate divisions. So we have lawns, large project and small project. Kind of how I broken it up. We're looking to grow probably 30%. Next year would be around like 1.4, $1.6 million in summer revenue. What I was planning on doing was having three working GMs for each division, one per each. So one would run the four long crews, one would run the small project crew, about two crews, and then one would run the large project crew, about two crews. So I wanted your opinion on that. I think it would work amazing. Rather than hiring one guy because there's so much to teach and it's this way, it kind of keeps everything compartmentalized. Right. So I want your opinion on that. And then number two would be how to incentivize these guys. I had my idea, but I'd love to hear yours.

Or are they going to be expected to do the estimates for their individual apartments?

So we know for sod for large projects. Our guy is from Ecuador and his English isn't the, the best. So we were thinking of having the salesman doing the sod. And the lawns will likely be the salesman as well.

So a salesperson is separate from what you're calling. So I would, I think that in this case terminology and titling is really important. I would not call them working GMs, I would call them crew leaders. And they'd be a crew leader for small project, a crew leader for large project, a crew leader for lawn care, whatever you said. Because a working GM by definition manages the entire business. Like the GM manage the working GM or whether they're a full time GM or they're a gm. Plus the GM is at the top of the company that's technically you. So I would classify you as a full time gm.

Okay.

They are crew leaders inside of departments of operations.

Okay. Right.

And I think that, that titling is important because now they're expected to be out in the field leading their team, leading the their division, leading their crew. But they're not managers. Right.

So my, my goal with them is to be about 80% on field, 20% off, at least for this year. And then it'll slowly get to the point where, you know, they're managing the lawns are a lot easier to manage. So they're able to manageable, double the crews. So he's running four. And then obviously the large projects, the one time projects are a lot more to manage because you got to, you know, sell them all. So yeah, my plan is to, they're, they're in the field 80%, they're managing the employees. So they're, they're essentially making sure everyone shows up on time, make sure everyone's efficient. We wanted to implement sort of like a P for P, but kind of in a way where every week they would kind of calculate gross profit and basically incentivize them based off gross profit quarterly as well as the employees based off their gross profit per crew.

Yeah, typically the crew like. Okay, when you say gross profit, please break that down.

Okay. So I would take revenue minus probably just our two biggest Expenses being fuel and labor. Sorry, not fuel and labor. It'd be. I wouldn't.

You just want to be careful because now you're basically. If you buy more assets or shop space and you increase overhead, you will make them more efficient while at the same time increasing your cost and inflating the amount that you're giving to them. So like that's why we do profit sharing. Because it's bottom line, whatever is coming out of my bank account is going to theirs kind of thing. But it's going to get difficult if you try to do the three different department.

Right, right.

So I would much rather do it based upon. Because. Because they don't do the sales. Right. You have this third party guy doing the sales like outside of their apartments. You could very well. Because that, that third party I'm assuming is going to have incentives around efficiency or like does the job get the on budget? You could just also convey that to each of your team, your three, you know, crew leaders. It's like, hey, for the month, if you, if I'm going to make up numbers, 90% or more of your projects are below budget, then you, you get a bonus. And you could also do it based on budget hours too. Like if it's basically efficiency score, like if it was 150 budget hours in that project and you got 140, awesome. You passed out of all your projects in the month. If X amount percent are above or you beat budget hours, then you win. The thing is the challenging part with that is they don't have the sales like in their hand. They don't control it. So there's always going to be this tension between you and the gentleman, the crew leaders, because they don't control what the budget hours are are or how much supplies, materials and costs were baked in that job. And that's, that's the challenge when you start giving incentives to someone who's a technically a mid level because they're not the top is they're going to feel very handicapped as to what they can actually do to make more money because they're getting this job and it's being told to them what the pricing is.

Okay, I see. Now would we. You mentioned about the salesman kind of getting tied into that. Right. With the budgeted hours. So my plan was rolling this out was having kind of meetings to make sure that everyone's on the same page and then it'd be great communication to the salesman, hey, you're charging too cheap at this job. We got to charge a little bit more.

Yeah, but the challenging part is going to be that you as the business owner have the incentive of making sure your crew stays busy. And the crew close ratio is high enough. If you give them a percentage of gross profit, the only thing they care about is that that job has enough budget hours and extra supplies and extra material baked into it. So their gross profit numbers high enough.

Right. Which will inflate pricing.

Correct. And reduce close rate too low.

Okay.

And then also like if your estimator is like, oh man, I feel pressure from my crew leaders, I got to go higher in price. Cool. Now your, your close ratio got cut in half because he's going, he's padding all his estimates.

Okay. I like that idea of the budgeted hours because like you said, if we buy a $50,000 stump grinder, obviously they're gonna, they're gonna move quicker. But we'll take that into account with budgeted hours.

That's why P4P, we go straight to budget hours. It changes in every job. We can dial in accuracy as time goes on. It has nothing to do with overhead. It has nothing to do with any other my expenses. It's just how long do you take? Because that's what they can actually control. And as the leader of your crew, you should make them be more efficient by getting all their trucks set up in the morning. Make sure the material shows up on time. Like you start coaching your crew leaders on how to make their team more efficient so they beat budgeted hours.

Okay. So that would change my incentive plan. I was planning on giving them like eventually 10% of the gross gross margin, gross profit. They're basically just removing the labor and material. How would you do that now?

Well, the problem, the problem with that model is you could be losing money and still be paying them 10% because you could have a whole bunch of overhead. Overhead that's eating out all this expense. Especially you grow a project based business and you have extra overhead, equipment, etc. And they're still going to expect 10%. So like you could very well end up paying the money and losing money in a quarter. And so most of the time the only thing I want to do when it comes to that sort of is profit sharing either based on distributions or pnl. Because simplest it's challenging when you do this divide like you are, because to your point, there could be one really bad player affecting the profit sharing for the other person, like the other department. And so that's why I would just go after budget hours and that this is something that can trickle all the Way down to your technicians. But you could also just chunk it up to your crew leaders, which is like we take how many budget hours were assigned to your crew and if it. If you're at 80% efficiency, 90% efficiency, 100 efficiency. Like you could have tiers of bonuses based upon their efficiency score.

Would you do that like weekly?

It depends on your project size. If you have big projects that take two or three weeks, I'd probably do it like on a monthly basis.

Okay. Most pro, the large project crews are like one to two days to three, maybe small projects.

I would still do your bonuses based upon at least monthly just to make it more even. We do quarterly because there's going to be times when in a month, bad stuff happens, weather happens, and the guys don't make as much. Their efficiency stinks. I don't want them completely throwing the towel for the last week of the month because they know that happened. Right. So that's why we like doing quarterly. It's long enough to where they can make up for lost ground and they don't have months where they just crush it and now they've over like their expectations for profit sharing is too high.

Okay, and what would be a way to. Like you talked about incentivizing them with budgeted hours. Let's say they have excess budgeted hours or they're below. Would you go like, you know, 10 doll? Every extra budget hour they saved.

I would probably just do efficiency score. So I would. Do you already track their clock hours? Cool. You already know their budget hours. If you can just say, hey, based upon your efficiency score of your entire crew, including your hours, by the way, their hours get wrapped up into this.

Right.

I'm going to look at that whole thing and I'm going to have tiers of 50, 60, 70, 80, 90, and 100% efficiency. And at each of those, you are going to unlock a dollar amount, not a percentage. Because like percentages, they don't like out the window. Especially because you have this hairy thing with the three departments. You can't. Percentages aren't going to mean much to them. You're going to want to just be like, at 50% you make. No bonus. At 60% you make. I'm just going to make up numbers. 1,000 bucks at 70 you make, 2,000. At 80 you get. And you know you can afford that because now they're saving so many hours on a month. Let's just call it a quarter. That's 40 times 50, that's 200, that's 603 people under them, that's 2. They're basically managing 1500 to 2000 of clocked hours in a quarter. So if you can afford an extra two bucks per clocked hour, if they're really efficient, that's a good bonus, right? Four grand per quarter, right?

Okay, perfect. I got a question about snow, but I'll let these guys go. And if we have time to circle back, I'll ask about that. Thanks.

You got it, brother.

Yeah.

You got it. Justin, you're up.

Hey, Mark.

Just a little bit of a background of what I'm doing. So right now I got about five guys, one part time, kind of, and then one part time admin doing about. Right. About 700 in revenue. We profited about 80 this year. And I'm paying myself about 50 as a salary. So my question is, my admin.

She.

She's getting about 25 hours right now. She's kind of complaining and she's kind of on her way out just because she wants to be full time. I don't have the work for full time, but she kind of. She helps me tremendously just back in, just because I'm focusing on the guys and just selling. And I also do field producers a bunch of the time as well. So do I take over her position and kind of stay where I'm at, or do I give her those extra hours and then just hope that she kind of just fills those hours? I'm kind of stuck at like, what, what my next step is here. Just to kind of keep her because she does help, but she's kind of like strong arming me because I don't have the extra work for her. Yeah, that's my main question right now.

Cool. So are you trying to grow the business right now, Justin, or is it pretty much kind of you're gonna kind of keep your on that size?

So right now I'm in profitability. We just raised prices about 10%. So right now I'm kind of happy where I'm at. So I'm not trying to grow too too much future. I definitely have plans to grow, but my main focus right now is stay where I'm at trying to buy a house. So I like where I'm at right now.

Got it. Gotta get some good tax returns. Let's go. Okay.

Yeah.

So how much is she getting per hour?

She's getting 25 an hour.

Cool. So right now you would basically need to pay her about $25,000 more per year to keep her full time. You just raised prices. Let's just Call, you said about 10%, so you just made about 60 to 70 grand extra profit. I personally, if I have a great admin person, I want to keep them. I would personally be thinking what else you can offload onto her to make more money in the business yourself, because I think you'll make more than $25,000 if you focus more time on other stuff besides admin or other, anything else she could take off your plate. And so what I would do if I was you, Justin, because she's pushing for it, I would list off everything that you do on a daily basis. And I would happen to believe that if you put that list in front of her and said, I am willing to give you more hours, but these are the things that you'd have to be taking on or some of them and go through them with her and be like, could you do dispatching? Could you do follow up phone calls? Could you like. So as I say that, is there any of those type of things that come to mind that you pick? She could potentially take it on, but it's going to be like a lift in terms of her skill set.

Yeah, she definitely, she could definitely handle that. She came from a roofing company, so she knows how to schedule, she knows how to dispatch. She kind of does that already.

Are you doing those things now or

sometimes you're kind of getting involved right now. So we kind of depending on the week, she takes it over. If it's a slow week, if it's busy, then, then it's kind of up in the air. But the only thing is that I have with that is she's, she's remote. So she's down in Florida, I'm up in New York. She has an eye on things, but she doesn't have a day to day aspect of her. Right. This is happening day in, day out. So that's the only like kicker is like if she was here and we had an office, I would be like, all right, perfect. This is like a perfect position for you. But that's the only kicker. She doesn't see exactly what goes on day to day.

Yeah. So like something like scheduling is sometimes difficult when they're remote. I get it. But there's a lot of things I'm going to go out on a limb and guess that you do sometimes that she could do. And it might be a little bit of training. But if she's motivated to do those things and take them off your plate, the reason is because if she can do them for 25 bucks an hour, regardless of what they are. And Even if she's 50% efficient at it, and therefore it's costing you $50 an hour, you can make more than that if you just went and got in the truck and did work yourself. Right. And so I believe that if you really pushed her to take things off your plate and then just displace that time with a higher leverage task, either in operations or in sales, like if you took that time that you're right now probably spending, I'm just gonna guess, an hour to two hours a day that you are spending on tasks that she could probably take off your plate. If you were able to displace that with just like upselling, the business will grow without spending money on marketing. You'll get to capacity. You'll be able to get right back to raising your prices very quickly and make like you'd be able to get to capacity so fast, you do need to raise prices again. And that's a $70,000, $80,000 lever if you can get there. So let's not like stumble over the 25 grand. But I'm going to make her earn it by putting in front of her the things that have to get done if she wants those hours.

So now I. I kind of have mixed feelings towards growing, towards either staying here where I'm at right now, just because I have this goal that I want to buy a house, and I could definitely do it within the next year or two. I'm young, so that's why I kind of still want to grow the business and. But I don't want to do the copy and paste. I get the concept, but in my market, I think it just makes sense for me stay and just grow one big location. Would you say, in my situation, since I'm young and stuff, should I buy the house, get that, make everything just stay where I'm at, or should I kind of grow the business, take it easy and just grow it and then a couple years down the road, then kind of focus on everything else.

The thing is, obviously you want the house for some reason and the business serves you. And so the reason I am, I encourage people to go into profit mode is because it builds the habit and the skill of saying, I'm not going to grow and the business is going to serve me. When you're in profit mode, the business is serving you. When you're in growth mode, you're serving the business. And so I'm a big fan of going to profit mode for a year or two, get the good tax returns, make more profit Next year you can always go back into growth mind by simply taking some of that profit and putting into marketing.

Right.

So like it's not like you can. You never can go back to growth mode. So I'd be a huge proponent. Especially you're young. Like build the skill of going into profit mode, having cash in the bank. And when you go back into growth mode in a couple of years, you'll have the capital do it in a really big way. And in a perfect world, you'd have a full time admin behind you. Ready to scale you to 1.5.

Got it.

Okay.

All right.

Thank you for the help we got, Aaron.

Hey, Mike. Thank you for all the value. Yeah. To us out here. We're definitely trying to do the copy and paste situation. We have about 45k overhead total between our two small little locations. Okay. One location does about 141k. The other location did 79. Almost. Yeah, 79k last year. So that's where we're at with the two locations. The one location that does 141. I have a guy, he's good. I pay him salary. But what do I do as far as trying to implement a bonus program? Do I try to pay him revenue bands? Do I pay him the small bonuses like the upsells and the customer referral bonuses, attendance bonuses? Being that he's on a salary, he makes about 45 a year. Getting to a point to where I need to start backing out somewhat. Not. I mean as far start doing more sales, less operational field work. I'd really like to get to that point.

Are they basically technicians just in different locations?

Yes.

Okay. Like. Yeah, like any technician. I'm trying to incentivize an upsells reviews. Those aspects. Are they like starting from different locations and them by themselves in the morning?

Yeah. The guy, that salary in the flower mound location, he starts by himself. He runs the route. He basically takes care of everything. I'm really hands off on that location. He really does everything.

And how far away is that from your first location?

About 13 miles.

Why would you not just have one location?

Because of the drive. I figured like you know, the 13 mile radius, trying to keep it tight, keep the routes tighter.

How long of a drive is it?

20 minutes.

Yeah. Like personally Aaron, I would just do one location for now. Because right now by splitting it up, you have a bunch of inefficiencies. If you look at his budget hour, like his efficiency score, it would go up dramatically if he was underneath your management. And he might be your GM down the road once your first location gets past 500,000. But right now he's a technician out in limbo and also you're paying for, is it a shop space or does he keep his own truck as house or how does that work?

We rent a lot and the lot's about $300 a month.

The $300 a month, if you look at his, his wages, that covers about 15 hours of his time. $300. You're not saving that much by saving 20 minute drive. Personally, like I'm never going to start a new like a secondary location until my first one is over 500,000 and in profit mode. Then like he might be the, a great GM for that spot and it might even be that down the road you cut off where he's currently serving and make that a second location. But right now at this size having two spots, you're, it's very difficult to scale it because he's not going to be a great leader because right now he's a technician. That's what he's doing. He's, he's mostly being a technician and he doesn't even feel like he's really part of a company because he's starting from like his own little shop space. Like there's nothing preventing him from just doing this himself besides getting the customers. So you're also putting yourself in a pretty compromised position in terms of him even like taking your customers because he controlling that entire process and he's essentially operating like a solo operator.

I've been working the second location myself with my son. My son's a teenager so he helps me out part time and he doesn't drive to the second location. He basically, I mean he's probably producing about 125 to 130. I think when I ran the numbers in the one location that he's, that he's running the rails on every day. Would you recommend that I try to find a middle ground between the two locations? Maybe that he's covering both a hire a second guy or do I hire a guy to start running the North Lake location apart from Flower mound, I

think 20 minute drive, that's a significant amount. When you have 5, 10, 15 employees driving that every day. That's just to really add up. And it starts to make sense to do another location. When you start getting 30, 40 minute drive away or every day they're driving 45, 50 an hour a day, it's crushing their efficiency score. Now it makes sense to split things up. But for now with you, your son and this other gentleman, like you could very well have basically you and another guy together. If you combine these two locations, making almost $250,000 in annual revenue, you'll be way more profitable if you bring us in house in one location and then spend a couple of years getting that past 500,000. And he might be the general manager of that location, but right now he's not going to make a good general manager because he doesn't even know what good looks like because he's not watching you every day. I would personally bring him underneath my wing as a technician. You're the general manager of location one and only. And then just make it very clear to him, I would love for you to grow at the company. And then when we get past 500,000, I would love for you to take this location over. And then I'm going to go start this other new one in that area and try to scale up, and then we'll break it off.

So initially we kind of did that. We. We worked together. We were doing jobs in both locations. I was only renting one lot space at that point, but. And he got the hang of it. He was doing it great. And that's when I felt comfortable letting him do the one location by itself. And so we kind of did that. Although I know I did it probably a little bit too soon, you know, but that's where I don't know. So you feel like I should rein it back in a little bit rather than trying to hire another man in the other location and kind of do what I did with the first guy as far as training him on how we do things and then start meeting both guys.

It's like if you. Yeah, I think if you hired another person in that other location next year, it'll increase revenue by about 30%. Like, it's not going to be managed well. Like, he's doing great as a technician, but I. And if he does great with an employee, like, it's such a unicorn. You now have a huge key man risk because, like, he's such a unicorn. I don't believe, though, that if you add one more employee, it's going to be a double the revenue next year. It's. It won't. If you bring that person underneath you, he can learn how to manage underneath you as you learn that skill. Because right now, like, you haven't even managed technicians, like, underneath you, and you've got to learn that skill so that then when you get another employee underneath him, you know what good looks like. Because the worst thing that can happen is you hire someone underneath him and you can't even judge whether or not he's being a good manager because you haven't managed yourself.

I mean, I feel like I did. I mean, I worked with. He worked with me. We were running routes together for probably a year and a half. So I feel like I somewhat trained him already on the tech side. Like, he knows the routes, he knows the work, he kind of knows our little systems that we have going. It's just I'm trying to replicate what I did with him in the other location and then let them roll, you know, let him roll. And then we meet together weekly or whatever just to make sure that I'm training and we're expanding. You know what I mean? I'm trying to like grow that north lake side a little more.

If your goal is to make more money, I would bring it in house together in one until it passes 500,000. And then I would think about making him a general manager or breaking it off and you doing a second location. But until then, you are banking on this person being a unicorn and being able to basically run their own business underneath your, your label. That's what's happening. And that's very hard to replicate. Like, so if he, if he left tomorrow, I can guarantee you, you would just hire someone and you do what I just said, because he's a unicorn. And I would also say if he just came back to working with you, you'd make more money in the short term. But more importantly, you would gain the skill of management. When you get two employees instead of just one, and then three, and then four, and now doing past 500,000, you put that thing in a profit mode. Now you have a real business to hand to someone as a general manager and you've got the skill of management in building it to that size.

So would you recommend I take the location that's doing less, the one that did 79,000 last year? What should I do with that?

Then I would just keep servicing that area with the main one location, I'd keep growing. And then down the road, Once you pass 500,000, you could always break it off if you wanted to. And now it would be maybe 150 to 200,000. And then you scale that one to 500,000. Right. But what's going to happen is you're going to dilute your. Your ability between these two locations at such a small size. And they will not become profitable long term, maybe the short term, because you have this unicorn guy that can literally just he's basically running his business underneath your name, which is great for you now, but if he, if he's out, you will be forced to go to one location anyways because no one else is stepping in and immediately going to run this business for you. Start from a shop space by themselves. Like why would he not buy. Wouldn't that person not just be working for themselves?

You know, so, so you would suggest that I, I just. We all start from one location. I'm working with him again. Until we get enough revenue to bring in a second guy. When we bring in the second guy, I let them go.

Nope. Keep growing the revenue. I want you past 500,000.

As far as I'm going into sales mode at that point. Right. Myself, personally. Myself.

No. The volume of estimates will dictate that. I'm mostly looking at whether it be three or four technicians. Getting past 500,000 would be the first benchmark before I ever think about breaking off another location.

Got it.

Yeah.

With strong prejudice, Aaron, because I want you to win. I just see it too much. Like at Augusta. I see this all the time. Everyone. I want to get another. We now require them. Now. They can't even. We don't even allow it because we saw the success rate of locations that got past 500,000 and did multiple locations. 100% success. Almost like all of our closures have been when people start a second location and they're not past 500,000.

So should I wait till the two locations together are at 500?

It's going to be one. It's going to be one.

Right. But the two areas. The two areas generating revenue together at 500k and then split it.

Yep.

Okay.

You would not try to make that. You would not try to make that jump in one year.

No.

Going separate.

No, no, no. The. The only, the only advantage you have with as you are currently stating it with the two locations is drive time. And so with one or two employees, that's not enough savings for me to reconcile. Splitting everything out now down the road, when you have people that you want to move up into the, into new roles, you want to have a flat organization with one tech, one GM and multiple technicians. There's more advantages to doing multiple locations. But right now the drive time is literally the only reason we're cutting this out. And it's not enough savings for us to split the two.

Does it make a difference that I already have two trucks and two trailers? Like, because that's not an added expense. We already have that debt free and everything like that. That doesn't make or break that.

I'm not guessing on this one, Aaron. I promise you. I just want you to win. Bring them together. One location, get it past 500,000 and then that person, when you elevate someone, they'll actually have a management role. You'll be able to get better quality people more consistently. Because most people are not going to be, hey, you're going to manage your location and you're going to work every single day of the week by yourself. Like they're not gonna. It's so hard to find that person. So with extreme prejudice, highly recommend that in 2026, we're trying to give away 100,000 copies of the copy and paste millionaire book that I recently wrote. It's the blueprint from getting from zero to $3 million in annual revenue for any home service business. Now, as part of the hundred thousand book challenge that we're trying to give away, we have two ways to be able to take advantage of this. One, you get the free audiobook, ebook, the course, and a physical copy of the book sent to you for free without paying shipping. If you go to mikeandy.com cpmcourse now if you're like, I don't wanna take a course. I just want the book shipped to me right away. You can go pay for the shipping at $6.50 for a $35 book. I'll cover everything else. Just go to mikeandys.com 100k Our goal is to get this book in the hands of 100,000 home service business owners. Christian's up.

So you said that we can't profit and grow at the same time.

To clarify, you can profit and grow. I believe though that like the philosophy of the business as to whether we are in growth mode or in profit mode, but people can grow and profit, but you're usually emphasizing one or the other. So. But go ahead. Yes.

Okay, so we're planning to add a second crew this year and also raise our prices for new customers and existing customers because we finally figured out pricing, especially for like mowing. So should we just not raise our prices and grow first and then raise

our prices or so in general, always love raising prices because most people are under underpriced. Right. So like if I, like if I had to ask you what your close rate is, do you know what that is right now? Approximately like out of 10 estimates that you send out, how many accepted do

you think, like go 50%.

Okay. All right. So I think that in that case raising prices might actually affect Considerably Your. Your close rate and existing customers. The reason I say go to capacity is because if you do have a set, have you already bought the second truck? No, you have not. Okay, so the first truck, is it basically you, Christian, and one other person?

No. So it's my brother, and he has a helper.

Okay. And then are you just doing out. Out of daily operations right now, or where's. Where are you at? Sorry.

Like, back and forth. So pretty much, if they need help or it just.

I'm going to go on a limb and say you're at capacity now with the one truck, right?

I think so. But at the same time, I feel like we're not being smart about it, and I'm just kind of trying to get out of the truck really early.

I would agree. All right, well, he said it. Let's go. You're the man. I'm very happy with you. Let's go. I agree with that sentiment 110%. I will say this. You want to make sure that when you increase capacity, that is buy another truck or hire another person, you're doing it based upon the math. Not based upon. I wanted to get out of the field. Or even based upon. I feel like we're kind of getting busy or. I think we're going to get. We're going to grow. It needs to be strictly based on the numbers. And so have you used budget hours at all yet?

Yeah, but not correctly.

Yeah, we tried, but, yeah, I would.

I would first go through every single job and make sure there's budget hours assigned. And like. Well, I don't even know. It is great. What's our target hourly rate? Divide every single job by that target hourly rate. There's your budget hours. So I was. Go ahead. You were doing it, right? Is that what you just said? Let's go. Right?

Yeah, that's what I was doing. Okay, that's great.

Because. Because what we need is to know right now, how many budget hours do we have on a weekly basis recurring. And do you guys mostly do mowing? You do some projects, too, right?

It's a lot of mowing.

A lot of mowing. Great. So we determine how many budget hours do we have right now of recurring mowing, and then. Then as a rule of thumb, you can assume that someone's working full time at 40 hours. They're usually going to complete about 30 budgeted hours. Okay. If I had to guess, you probably have 50 to 60 budget hours per week of Boeing. I'm just randomly guessing. That's about two full time People, and then your projects, you're kind of doing like on Fridays, on the weekend, it's kind of like a little extra, you know, little upsells, little projects, etc. Great. So determine what that number is first. So that way when you sell a product in the future, you're not going to just have like $480. You have, that's eight budget hours. I have my target hourly rate. I know what I'm charging. And now we can actually determine how many budget hours we have before we need a second truck. Because one truck moving all day long, let's call it for five days a week, for eight to 10 hours, you're going to get two employees in that truck. Let's assume they both do 30 budget hours a week of work. That's 60 budget hours. We know when we get above 60 budget hours worth of work, we need another truck or we hit capacity and we raise prices. And so right now, this is why you feel like you're kind of angry, you're growing, but like we also want more money, is we don't have a number of what capacity actually means. And to do that, we need to know how many budget hours are on your schedule. And then when we hit that number, we have a decision to make. Do we keep the one truck and raise prices, go into profit mode, or do we go get the second truck? Christian goes out, bops into that truck, and now all of a sudden we can do up to 120 budget hours of work a week. And if you go that route, then you're going to be like, you got a lot of excess capacity. In other words, now you're doing 65, 70 budget hours of work a week with capacity because you have two trucks of 120 hours. And now you'll need to grow up to this point before you ever want to think about raising prices again.

Right.

So go ahead.

If we, if we do that and I go back into the field necessarily, who's going to be like, am I still going to be like the ops manager? And mostly the reason why I'm kind of trying to be out of the field is to help her with admin. But I know this year we're set on like hiring part time or full time admin, and she's going to do more of like the sales.

So I'll give you my opinion. Sir, what was your wife's. Is it your wife? Sorry, girlfriend? Name was your wife Malia. Malia. Okay. Very cool. All right, Malia, do you like doing admin or no? You do not like doing admin.

Okay.

That changes the game. You want to do sales.

I want to talk to people less.

So I want to talk to people less. Hey, that is an honest person. You guys have honesty down in this relationship. Let's go. Okay, so that's hilarious. Okay. You want to talk to people less. Okay. When you say people, do you talking customers or employees?

Customers.

Sales probably is not the move. Just saying, do you want to work less hours in the business? Is that the actual you're saying to me? I don't know.

I'd rather work on the business. Like, I like growing the business and doing all the internal things, and I don't like to do, like, the admin stuff and the CRM and talking to customers and, you know, sending the text and everything.

I'm.

Okay. Do you know how to do operations or not? Like, do you know how to do the work?

No.

No.

Okay. Okay. That's good enough. Okay. Do you like hiring?

Not really.

Okay, so you really just want to think, like, strategically about the business, Maybe finances, things like that?

Yeah.

Okay, so we have to grow this business. You cannot afford right now for you to be in sales when you don't like to talk to people. You cannot afford to hire an admin person. You cannot afford to have Christian off the truck. Right. In order for all those things to happen, you have to grow a much larger business that can afford an admin person and afford to get Christian off the truck. So right now, I would, if you can, for the next few years, be focusing much more on growth, because none of your things that you want to happen happen at 150, $200,000 annual revenue, you afford an admin person, and for you to afford someone that can get Christian off the truck as an operation person, you got to be doing 600,000 plus, easy. So, like, I would just focus, like, growth, growth, growth. And I would like. Are you guys in homeworks by chance? Just a question.

Yeah.

Yeah.

Have we had. Have we had our onboarding call yet?

I don't think we started in, what, 20?

Whenever you had the price lock.

Yeah.

Oh, my word. Oh, that was before we even did onboarding calls. Okay. Okay. Reach out to support. Try to get an onboarding call with me. They can put you on the next one. I think that's actually tomorrow or even, if you want, in a couple weeks. The reason I say that is because we need to create a plan for your growth over the next two to three years to get to that point so you both are on the same page. Because I know. I understand. Christian, you don't want to be on the field. And Malia, I understand you don't want to be doing admin and talking to people, but you'll need to do both of those things to get the business to the size to where you can afford to not do it. Make sense?

Yeah.

Yeah.

So we need to get a really good plan in place that you're both on the same page, because you're both going to have to do something you don't want. If you want to get to the point where you can afford an admin person and you can get off the work, off the truck.

Yeah.

Okay. So this year you're saying that I should still do admin and he should still be out in the field and we should stick to one crew.

I'm not saying you should do anything. I am optimizing for what's going to make you the most money and what's going to make the most money and like, more importantly, the security and financials of the family is that you don't stretch the business too thin by getting him out of operations and you out of admin. The business cannot afford that right now, and it's not going to afford that anytime soon. So if I told you to do that, you'd feel good for about six months until you can't make money.

Yeah, yeah.

Right. So we need to have a plan in place, and it's going to likely be a tiered system, which is likely going to look like, okay, we can get Malia out of admin probably within a year and a half. But, Christian, you're probably going to have to be on the truck until you pass 500,000, which might be two or three years, depending on how fast you grow. Right. Like last year, did you. What, like 150, 200,000.

We were 234. But that was like, combined with Christmas lights. Yeah. Morning Christmas lights.

Like 165.

Okay. But we got Christmas lights. That's good. So, yeah, it's very possible that probably within. After this year, Malia, I would say let's target admin. Getting that off your plate. We could bring a VA in to be able to do, like, things like phone calls and answer. Excuse me, an answering service. Think things off your plate. Admin. Slowly, next spring rush, you can hand those things off. This year, you're creating systems, you're creating screen recordings for every single thing you're doing in admin, and that's your ticket to eventually handing it off. But we have to do it Same thing is going to be true for you, Christian. We've got to grow the business past 500,000 before you can afford to get someone in there that's like manage the team, manage the equipment, get all that. And then you just be able to focus on sales. And doing that will probably get you to pass 800,000 to a million by you getting and focusing on sales because that's the part you're gonna, you're gonna crush at. So I would not do anything though that you thought about this year, like trying to get Malia out of admin. You can't afford that. You're not gonna get anyone that. You're not gonna get anyone that does it better than you. No one.

Right.

So like lean into the advantage and then create systems, Malia, because that's the thing. I think you're actually probably pretty good. It's like systems sops like organization. Do that, scratch that itch a little bit. And then yes, you're going to have to talk to people and then next year we'll have the systems in place to be able to hand those things off. And the business next year might be more like 400,000. Awesome. Then that next year, Christian, you're going to do the same thing in operations. You're going to get someone underneath your wing. They're going to be. You're going to show them how to do one on one meetings. You're going to show them how to do hiring or show them how to do the equipment maintenance. And then you're going to hand that stuff off so you can move into sales. When we think about sales, operation admin, we're going to hand off admin first, lowest leverage. Then you'll hand off operations and they'll move into what's called a full time. The full time GM size where it's just 750 plus.

Are we considered solo or working GM right now?

Right now you're moving out of solo operator into working GM. And that's why I need the GM Christian in the field still as much as possible, 80 to 90 a day still needs to be out in the field. That's the difference between making money and not. And then you take that money, you invest into growth and you can get to past 500,000 and then we can start thinking about getting someone else to help with operations.

Okay.

And for crew leads. So I think my brother would be like very, very good at being a crew lead. And he's like best worker. He knows everything pretty much.

He's really good.

But the thing Is he doesn't want,

he doesn't want to do it.

Yeah, he doesn't want to.

Oh, everyone's so honest in this family.

Let's go.

Okay, so then he's. Don't push him. Right. Because where my head was. He's going to be your operations manager. That's where my head went. But if not, if he doesn't want to manage anyone because people don't, like in this family, don't like to talk to people, they don't like to manage people, they don't like to work. Like, you know, I'm just joking. But he's still young and he's good guy. I'm just, I'm just playing with you. So assuming though that like he doesn't want to manage people, then he would just be an excellent technician, probably a trainer maybe, but he's not going to get a role because you do not have, you do not have enough hierarchy at even a 6, $700,000 business to have you as a GM doing sales, then an operations mayor, then a crew leader. No, no one's doing work. Right. We need to focus on. Even your operations person needs to be out in the field most of the time. And I happen to believe Christian, over the next year or two, if he sticks with you, he'll actually want to move into the operations manager role when you need it. Because now there'll be four or five employees and he'll move kind of almost organically into that operational role to be able to take things off your plate. Yeah, I wouldn't, I wouldn't be like, guys, we're gonna, trying to set him up with her and like, promise him, just be like, as the business grows, he's gonna take more of that stuff on. I just know he will. And in two years, you're gonna need. And he'll be ready.

Yeah, yeah. So I keep telling him, but we'll see.

When you say you got, you keep telling him. Is that him saying, I don't. Don't put me in a leadership role or is that you trying to convince him to stay with you?

Him saying don't put him in a

leadership role because so he's a technician. He's a technician. Don't say anything about leadership. He'll just move into it. Christian, don't, don't worry about that. Like, it's literally two years away.

Okay.

Guarantee you in two years, if he's will still with you, he'll move into that role.

Okay.

I have a sort of kind of off topic question about routes and route density. So that's like. We live in Clarksville, Tennessee, outside of Natural.

That's like.

We used to live there. Really?

Yep.

My mom and dad had. My dad was a pastor just outside there.

Oh, you know Clarksville.

Okay.

You. It'll take 40 minutes to get to the other side of Clarksville. So we have to be kind of

weird about our roads.

Yeah, Selective. Because we don't want to be everywhere. Like, we like to target the nicer areas, the nicer lawns, stuff that will stripe and then not just weeds and stuff. So there's like a really nice neighborhood and then a really not nice neighborhood right beside each other. So it's really hard to explain to other people, customers. And like, if I were to hire admin, where we service. So what would you recommend for that?

Well, let's question the assumption first. Why would you not take someone's money if they're willing to let you cut down their weeds? Oh, you're looking at Christian now. So in my personal opinion, if we're. If we're trying to optimize for making more money, they're right next to each other. We cut that person with weeds.

Yes.

Yes.

Okay, now let's assume for a moment that for some reason we are not doing that because of our brand or whatever. Okay. Personally, money, all money is green. If you're willing to pay the same price as next door, I'll mow your weeds. I'll mow whatever. I won't mow anything. Like, I don't need to see stripes other than circles. But, like, when it comes to the admin side, just do Google Earth Pro. You can set up maps and then what happens is when they put the address of the customer in, it just shows them if it's in the service area or not and which day of the week too. Like, you could just make the map separate. Like, the color is different. So it's Google. Google Maps Pro. Sorry, Google Earth Pro. It's on desktop. You can download it and then you can create maps that they put the address in immediately. Will just show them. Is this in the service area? This is what we use for all Command center for Augusta for all hundreds of locations. We have service areas and territories. Everything on that, that, on that app, it's free.

That's crazy. Thank you. That's exactly. That's what I was asking. Thank you.

Yeah.

So is Malia going to be doing the sales as well, or is that going to be me?

Sales in terms of meeting people, that's still going to be you. Out in the field, I would really encourage you guys, especially once instant quotes come out at homeworks, to push in that direction. Because first off means you don't have to talk to anyone. Malia, let's go. But secondly means you don't have to train someone on things like service area and all the other things you just like. It's get to my website, check out. Right. So, but in terms of in person estimates, still going to be you, Christian, Malia, do you guys have any over the phone estimates right now?

No.

So same thing, same program, Google Earth Pro. You're going to use that bad boy and you're going to measure the property. You're gonna have a very simple sheet, like zero to 5,000 square feet. 5,000 to 7,000. 7,000. You're going to measure by square foot and you can do via mowing. And I would recommend, don't discriminate between weeds and not like it's a satellite, it's a square footage. The first visit, you're going to tell them, hey, if it's overgrown by more than six inches, we're going to be charging a dollar fifty per minute per man. And if they freak out over that, probably means it's overgrown. Probably don't want the customer. But if they're like, yeah, cool, that's fine. It was mowed two weeks ago. It should be fine. You're rocking and rolling. That keeps you in the field, Christian. And right now you're doing estimates. I'll say this because I know it's like to be here. You're doing estimates because you don't want to be in the field. I want you to be out in the field doing more work and letting the estimates being handled over the phone down the road. Instant quotes, so it doesn't. You don't have to. Malia doesn't have to talk to people.

Okay.

Which is the funniest thing I've ever heard. That's so great. We're honest. We're honest. Most people still aren't willing to say it, so I got, I got to make fun of you guys. All right. Is that all for now though? Is that good?

Yeah.

Yeah, for now.

Thank you.

Eric is up next. Go ahead, brother.

Hey, Mike. So I had another question. So at the rate we're currently growing, we're going to hit capacity here in probably the next two or three months. So being business for like basically four months, when do you think the earliest is that we could start raising prices on like our customers?

Yeah. So when you hit capacity, then you have the decision, I try to make it as simple as possible. So sometimes it is like maybe feels a little diluted, but it is very simple. When you cannot do any more jobs without working on the weekend, you are at capacity or buying another truck or hiring another person, like you could, like that's always like, well, I could just get someone to help me. Okay, great. You just extended capacity by hiring another person essentially. And so I would first. The biggest thing, Eric, is establishing what capacity limit you are actually going for. Because that's why most people will never raise prices or go into profit mode is because it's like, well, I can kind of work a little more hours. Like I would ask yourself, like, how many budget hours can I actually do before I like, I'm tapping out. It might not be 30. Okay. I'm willing to do 40 budget hours a week. It's going to be put you in like 50 hour workweek. Okay. If that's fine with you. Cool. But let's set that in stone. And when we say, hey, when we have three plus weeks of work on the schedule in the future with 40 budget hours, I'm making up a number that, that budget hour capacity, that's when we, we flip the switch. That way there's no like guessing. There's no like, well, we could put a couple more jobs on. That's when people get in this very slippery slope to burnout.

Okay.

But so even for like if we just started a customer like two or three months ago, like, tell them we just have to raise the price already, that'd be okay.

Again, this is, this is the determination when you get to the crossroad is if you're going into profit mode, you raise prices. And you need to raise prices and lose some customers in order to make room for the new ones that are coming. And so this is why people are like, well, what if a couple people leave? I just got them on. Like, it's like, you're not at capacity because at capacity you're like, I must get rid of customers, otherwise I have to turn off my leads. So to establish what that number is for you, Eric. And that is like how many budget hours before I'm like literally willing to turn away customers that are coming in. That's your number for you to know when you hit that you're raising prices because you need to make room for new customers. And so if they get mad at you and they leave, like, thank goodness I need some of them to leave.

Yeah, that makes a lot of sense.

Ian's up next.

Go Ahead brother, be back for round two. Second question. I guess I had on distributable cash. So last year we were profit mode did a little over a million in revenue. So set the goal for 90k in the bank. But doing that in going we're going back into growth mode for 2026. Do you have the same kind of concept for growth mode as you do for profit mode or is the distributions different? Should that be less considering that the growth is going to suck some cash or what are your thoughts on that?

Yeah, personally I look at the threshold for distributable cash much more based upon your risk tolerance. So I wouldn't move the 90,000. What I would do is say where are we spending the distributable cash? Instead of it going in your pocket, it's going to be going into growth.

Right.

Because if you, if you go into growth mode, you buy another truck, get more marketing, you're just going to have less above 90. And I'm not going to go into my cash reserves unless I'm all of a sudden accepting more risk. So I would only move your cash threshold based upon your risk tolerance, not based on whether I'm in profit mode or growth mode.

Makes sense. And then with that 90k kind of nest egg, is that something like that lives in a separate account and that's for emergencies or whatever or is that something that's your, you know, that's your cash flow. You just try to keep it above 90.

We consider it working capital. It's the business bank account where money goes. Some people like to split it up and get fancy. When it comes to like profit, profit first model. We just think of like I need $90,000 for your, your case in the bank. That's going to make sure that if payroll hits, if something crazy happens or I don't get paid for a big job, I'm fine. I look at this working capital for the business to operate. I don't need to lock it up behind lock and key. That'd be an investment at that point. And I'd probably put into like short term yield treasuries or like S&P 500 or something like that. But in this case this is working capital, this is prior to distributions and then I take distributions and go put that in an S&P 500 or something like that. If you're just letting money sit, but this is working capital, usually it's being used for the business and thing is, after you do like if you say 90,000 is your, is your deposit or your threshold, there's a really good chance you go down to 60 or 70 sometimes because payroll hits right after you do distributions. Right. And so that's why we always want to make sure we have enough in that working capital for it to kind of fluctuate a little bit. But I would personally just think of it as like, it's cash on hand.

Gotcha. Perfect. Thank you.

You got it. I think Aaron's up next.

Hey, Mike, I wanted to go back and ask you on the 30% increase expected from a second hire. Is that gross revenue you mentioned you could only.

Yep.

Yeah.

The reason I say 30% is because that technician that you have working by themselves right now does not have the skill of management. So what happens, many times you have a unicorn technician operating by themselves. That's what's happening right now. You put another technician with them. You're like, okay, I'll build double revenue there. And all of a sudden, all sorts of problems are going to arise because that person does not have the skill of management. And what stinks right now is you don't really have the skill of management either, because you haven't managed a crew of four or five or six people. And that's what I want you to do underneath one location. So when you go break one off or someone else is managing, you know how to actually coach and train them.

Okay. And then next thing, 30. I have about 30 budgeted hours starting this spring in that north lake area and 45 in the Flower mound area. When should I hire a second guy?

Okay. So right now you're probably doing 40 there. Or he's doing like, 40 budget hours. You're doing like 30 budget hours. Approximately.

Yeah. Approximately. Yeah.

Yeah.

Like, you're right up against capacity. Right. And so I would say, like, if you're bringing in house, it'd be a great camaraderie to have, like, your next employee and him joining. That also opens you up for about 30 more budget hours of capacity to be able to grow in that entire area. And now, like, that gets you to 500,000 pretty quick. Like, I think, I really believe if this year you brought. You hired one person, you brought that person back in. Now you have a bit of a team. You have culture happening. He's learning through osmosis from you how to manage and how to lead. That that looks like a business that in a matter of six months, could very well be doing 50 grand a month. And I would rather that than having these two separate entities or, like, locations. And he's going to Get a second. If you put another employee on his plate right now, I can guarantee you without a shadow of a doubt, either he will leave or the efficiency will drop dramatically.

Okay. And, and so he's already on salary. We, we do the P4P software and program. So his efficiency is pretty good. It's always in the 80s. Although because the salary is so high, he doesn't see much money from it as far as bonus. But my. The plan was to pay him some sort of revenue band to help us to give him some motivation to help upsell and try to get us up to that 50amonth. What should he also be getting the smaller bonuses if he's already salaried?

Salary is tough. What's your base pay for if you hire another employee right now?

18 an hour. Base P for P33.

He's only at like 22 an hour.

Right.

If you actually extrapolate as salary.

Right.

So if I was you, I would try to con like I personally believe that he came back. What's your hourly rate?

18 minimum. His. His is like 21.63 customer to the customer.

Oh, 80. Yeah. Okay, so if he's running 80%, he'll make more money. Yeah, he'll make more than 22 bucks an hour on P4P. So in my opinion, I would say, hey, you can make salary, but you're coming back here. But I'm going to track your salary, which by the way is about 22 bucks an hour and P4P. I know based upon those efficiency scores and that he's a hard worker. It sounds like he will beat 22 an hour on PvP if he's under your watch. And then you'll just tell him like which one do you want P4P or do you want salary? You got to choose one or the other. He should be making about 24 to 26 bucks an hour based upon what you just told me on P4P.

Right.

And I think that will happen once he's being managed by you and like you're in one spot. Like I think his efficiency will actually go up.

And you think I should, should I do the revenue band bonus situation to help us?

No, because he's not, he's not responsible for growth.

Okay. And second man, you think I am bumping on the door? It'd be a good idea, yes. So should I do that this spring? Should I go ahead and hire this spring?

Yep. Assuming you have enough cash and you're going to be. You're guys going to be more efficient, more Importantly, if you're doing 70 budget hours right now, that means that two of you are tapped out. And so like get another person and then now he's going to come back to a team. It's going to feel like an actual business.

Okay. And then I'm still in the field. You know, I struggled before trying to increase sales, and that was one of the reasons why I tried to separate us, was so that I could have a little more time to focus on sales to try to speed up this process. I feel like it's just taken so long, you know?

Yeah. So if you get another employee now, between the three of you, you guys are going to be doing right up against 100 budget hours a week at 80 bucks an hour. That's 24,000. Wait, yeah, 24, $32,000 a month plus any material cost. So you're probably looking at like 35 to 40 grand a month. You're probably one more employee away from getting to 50 grand or so a month to where you could step out of the field. So you're closer than you think. I really do believe that. I think it's just a matter of focusing on opera, getting more work on the schedule and, and you being in the field. Yes, for a while. But once you cross the 120 budget hour or so now you will have to step out and do sales. You'll have four employees. You'll be out doing sales. Now the business in 5, 50, 600,000. That's a good business.

And you think, and the main reason why I shouldn't separate the two is the separation between me and him not being, not being able to train him as a manager per se.

That's one reason. The other reason is if he goes down right now, you're going to do this anyway. So there's huge amounts of liability and key man risk because you're not going to find people that want to go work by themselves every day. As an employee, that's what we call a solo operator. They just go own their own business. And that's also opening up to like them taking the customers because they build the customer relationship. Right. So. And then there's not any inherent efficiencies in saving 20 minutes a day with one employee. If you had 10, 10 or 20 employees driving 20 minutes a day, that starts to make a real impact for us to go start a satellite location, but not one.

Now, when I said 20 minutes, it's one way. So it'd be 40, 40 minutes to an hour a day.

Yeah, but, yeah, but that's about 15 to $16 worth of labor. Times that by 20, it's about 250 bucks. You're paying 300 over there for rent. Right. So it's not mathing. Like by splitting locations. There's inherent inefficiencies in doing so. You overcome that by having drive time saved as well as having people be able to move up and send the organization and manage people. Neither of those two things are happening, so I would bring them together. I truly believe you get another employee at the same time, increase your capacity around 100 budget hours, fill that person, get to the next person. And you. You likely. Because it seemed like your goal is really getting out of the field and focusing on sales, which. Cool. I agree. That's probably your strength. You will do that way faster bringing that in one location versus trying to dilute between two.

So for a small period once last spring, I had two guys rolling together. The. The main guy I have now, and we hired another guy for the spring rush, and they were doing both locations. This was before I actually split it or whatever. So they were driving out there and I was trying to implement P4P, but because of the drive, it just was not. That extra hour a day was what I felt like. Kept them under 70, you know, 72% efficiency score.

So, okay, so you drive out and do those ones while you're also doing sales. Keep them close to home where most of the jobs are. They'll stay efficient, they'll make good P4P. But you have enough on your schedule to keep busy out in the further. Because you're. You're going to be driving through all of your service area. You can do the estimates on your way to those other projects.

That's essentially what I'm doing now. It's just. He's by itself.

Yeah.

You know, keep doing.

Keep doing that and let him stay close to the shop with the new employee. And then as time goes on, you'll get more customers over here to where driving isn't going to make a bit. 20 minutes is not enough for me to move a second location. It's just not until you're at like a large number of employees.

And it's just solely the separation that you're worried about me from him, managing him. That's. That's the only thing you're worried about. You're not worried about like the. Because I really. I feel like I really don't have any further expense because it's. We're already done. We already have the truck and trailer. We have the two softwares, everything. There's really nothing else to spend other than customer acquisition in that other location.

Yeah, I'm just going off of a lot of seeing this happen. I'm not guessing on this one, Aaron. I'm sorry. So I would highly recommend bring it together. The little extra drive time, you absorb that while there's an estimated out in the field still doing work. Get, get this to four or five employees now you have a real shot at splitting that other area off. But now this core group of four or five employees is very core to their location. They're doing 5, 600,000. They have a strong GM in place that has watched you and has leadership skills. Like, I guarantee you that is the better route. Unfortunately, we won't know which one is the alternative. So, like, if you don't do that, it's going to be, it's going to kind of continue like it is now. And it's going to be hard to get him to manage people because he doesn't know what good looks like. You don't know what good looks like. And so, like, you're going to start bumping up against this. And this is where I feel like you're trying to do this the past couple years. What if you just like, all right, I'm locking one location, I'm scaling this one. I got to get past 500, 500,000 before I think on a second location.

It's just, it's almost like if I do that, it's, it's not much different than what I'm already doing. You know what I mean? Like, if I tell other than I'm there in the morning, say I hire the second guy in spring, I meet them every morning there at the lot and then I go do what I'm, what I need to do at the second location because it's further away. They might as well stay here so they can make P4P and be more efficient. And I work on growing that, that location with the less budgeted hours out, a little more to gain budgeted hours over there.

Essentially, I, I would move all of those customers from the One Homeworks account back into the first one, run it

all under one, run it under one.

Right. There's 300amonth in savings and apply that towards sales. And you know, again, we're talking about 300 bucks a month. Right. Like, I think strategically and like, from an operational perspective, the combination is why we should do this. But there are inherent other savings we're not talking about like software that you've Duplicated because of two locations, then you're not taking into account.

But then I have to, I'll have to hire another lot space for the second truck and trailer. And like I'm adding, I'm adding that 300 again. I'm adding it back because now I have to add, you know, like where we pay for the 300 in the one location. It's, it's one spot for one truck and trailer. So if I park a second truck and trailer there, I'm adding an additional rent space anyways.

How much?

The same amount. About 300.

Yep.

Yeah. So like this is where it comes down to simply like the strategic part, which is I understand that you might be moving basically back closer together and it's like, well it's. Why would I pay 300 there versus here when I can just save some drive time? The reason is because 95% of employees will not do what your current guy is doing. And that is be able to drive to a shop space, pick up materials, tools, a truck, go out and do work, come back by themselves, self managed like most. That's not, you can't scale that. Like you'll never find a lot of employees that can do that.

Right.

And so I want to create a hub that I can attract technicians with a stick. And then if you do that with four, five, six technicians that you can copy and paste, you cannot copy and paste one employee.

Right.

So I know in the short term you're like, I'm making sense of it. It's basically the same thing. I agree. But that hub, that will never work. Like if that employee left, I'm going to ask you like, like what would you do? You'd be hiring someone at your one. You just go back to one.

Right.

So you've lucked out with your first employee. And just this happened to me, lucked out with my first employee, one of my best friends and like built a business around it. And then I realized, oh, not everyone's built like him. He's incredible. He's a unicorn. Forget that we're simplifying services. The same thing is true here. You can't keep doing this because just by nature of if he was let go or he left tomorrow, you would hire someone underneath you at your one location is evidenced that the model doesn't

scale even if I incentivize them. You don't think with all the incentives, the attendance and everything, nothing. The bonuses are not enough.

I've seen it too much. Sorry Aaron.

I got you.

So if you need help like, like if you wanted to keep it separate, like it's just going to dilute your attention. That's like, man. Yeah, it's. I'm not guessing on this one. So I would highly recommend bring it together. I truly believe within six months you could get it to four technicians. And then it becomes a real possibility to split it off. So if you didn't want to go to the headache of like joining up in one CRM, that's fine, keep them separate. But like, structurally, the business needs one location that people meet at that is a duplicatable model where I can move technicians in and out. And if someone leaves, I'm not changing my business model. I'm getting another technician to come to that location.

And then once the both locations are doing 500 together, that's when you would look at maybe doing that, considering it.

Yep. Then splitting it off.

And then what would you. You would try to bring some of the text from location A to location

B or across that bridge, cross that bridge when you get there.

Okay, Got it?

Yeah.

Okay. I think that. I think that's it, Marco.

And then Ian, go for it.

Alrighty. Okay, so I wanted to talk about snow here. First off, I. I'm in Northwestern Ontario with Stephano there, so. Or we're still about 10 hours away just how big Ontario is. But he mentored me a bit on the new snow model and essentially we started scaling that. So we bought four tractors this year and we've been running that. We got about 250 clients. We're trying to triple next year. Okay. So we also run commercial snow, which we are considering selling. Basically the profit from commercial snow was taking is paying our loss for the residential snow. And when I say loss, I just mean with overhead. Like on the gross margin we're making maybe, you know, 30, but our overhead's 30, so it gets wiped. And essentially the commercial snow is covering that, the 50k loss. So I have about 250, 000 of equipment that I'm looking to sell and we're doing about.

Is that paid off?

So it's about 400. It's about $400,000 of equipment. Equipment, probably 250 equity.

Got it.

And 150. Sorry, 250s paid off. Yeah. And then we're gonna have to replenish and buy some because the plow trucks will sell, but we'll have to get it for sod. So it would spare me about 150, 200k cash probably, which would be huge to purchase all these tractors. I would just not have the income from it. So I was trying to value that first off. So there's the 250k of equipment, and the company, you know, does 150k revenue. It's very variable. And I was looking to sell that or consider selling that. And I was willing to take like 300k for the whole thing just to get rid of it, like 550k plus the equipment in order to scale the tractors and really dial in on that. And I think next year when we increase prices and put all our kind of eggs in one basket, we could really divert our energy and time into that and triple revenue while probably doubling our margins.

I'd say, yeah, Like, I would say, don't let the acquisition get in the way of making the right decision. Because you're like, you might not get 300,000. You probably won't at that size of revenue. Like, there's no multiple on the value of that revenue. So it's much more a matter of this is a strategic decision. Like, these are the type of things even we're talking with Arianes. Like, it's hard to put a dollar amount on attention, and attention, once diluted, doesn't show up in a pnl, but it likely is the detriment of all of our businesses. And so, but I would much more rather, like, I can triple the revenue of this thing.

Will.

Am I going. And I'm willing to take 50 grand less on this $300,000, probably a good move.

So just sell it. Like, market value, the equipment, I would

get rid of it. Like, if you strategically know the right decision, don't dilute the attention or drag out the decision because you're afraid of losing 50 grand. And over here is a, let's just call it $750,000 opportunity.

For sure. For sure. Okay, so basically, scale the tractors, get rid of the commercial.

Assuming this model, you know, works, you know, that's where you want to go in the future. If you want to tear the. Just tear the band aid off. Don't care about making 300 grand versus 270. Get rid of it and move to the new thing. Stretching it out and diluting your attention between the two different things is what kills businesses, like, all the time. Because if you go into this the next season and you're kind of doing both, again, that revenue will drop simply because you're not focused on something else. And now it's worth even less.

Yeah, perfect. Now, in terms of pay for these employees, like, it hasn't snowed in two weeks, and then it'll snow three times in one week where they get 40 hours. We're averaging 10 to 20 hours. What do you recommend in terms of salary, call out pay or hourly pay for these employees? I don't know if Stephan will kind of chat with you about that.

Yeah. What's funny, I was texting Stefan yesterday morning. He asked for a call. So I'm going to call him next week. He wants to try to do P4P because the whole model of like paying people year round is great, but you can run into some serious problems with cash flow. And so he's trying to move to more of a P4Pmodel too. So, yeah, like in the perfect world, if you have enough work and you got people on call and they're getting paid no matter what, it's awesome. It also comes down to supply and demand. Like if you can get people to show up when you need them because your market has a high unemployment rate, etc. Or you're paying gobs of money, it might make sense for you just to go that model. But the reliability of you having people that can go out after four straight days of snowblowing is important.

Right.

And so you're usually willing to, to pay extra for the capacity. Even though they might only work 15 or 20 hours quote per week on average, you gotta have them for the weeks when you need them for 60

and that's when, if they're on salary, just give them top up if they work more. I think that's what Stephan.

Correct. That's what he does. Yep.

Okay. Two quick fires. Auto renew. Do you do that on any reoccurring services?

We do auto renew, but we're going to make sure we let the customers know, like, hey, upfront, like, hey, this happens all the time. Also, as we go into the service, hey, just, just FYI, we're starting next week. Let us know if you don't want this to happen. But like, we're not going to be like, hey, you need to renew and you need to like fill this new thing or you got to accept this. We don't raise prices typically then either. We'd only do that if we are already at capacity. And then we don't even say like, here's your new prices, just here's your prices for the season. We're starting next Monday.

Okay. That's what I've been doing and it worked amazing. I find a lot less loss of clients, but I realized Stephan has 5,000 clients and he doesn't do that.

But yeah, you'll you'll see in the coaching call. It comes out Saturday. Okay.

Okay, cool.

I talked him through it.

Okay. Sweet, sweet software. Obviously we. We. He uses Aurora. We. We don't use Aurora. I think there's a little bit of risk because I know he's planning on potentially coming to Thunder Bay where he'll have all our client list and whatnot. So we use.

So I'll stop there. I would not take that as a risk. The reason is for a couple things. One, he could use that against you. It'd be the stupidest thing you could possibly do. So I'm saying this because like people say why they don't join homeworks. I'm like, what do you think? Why would I take your client list? That'd be. That'd be like career suicide for me. So I do not look that as a risk because that would be. It's a higher risk to him to do that and you tell everyone about it than for him taking the clients like it is not. I would eliminate that. So if Aurora is the best move, don't do it. Not because of him. That's all I'll say.

Okay, that's good to know. And if I ever sell the company, I think he'd prefer because he'd probably the one to buy it. He'd want it in Aurora anyways.

Okay, probably.

How about your software? Did you guys do anything with the snow model?

We are adding some stuff like we did. We just added in the field force where it'll remind you about the clock in, clock out. Like geo. Like the geo coordinates. If you come close to a property, we're going to hopefully have that surface on the dispatch board instead of just a reminder on the app. So it probably does most of it. But there are a couple features. Are the two features that Aurora does really good is does the auto like showing when they were there. That's really cool. We should have that here pretty soon. Where it's on the dispatch where we already does the reminders in the app but it doesn't show it on the dispatch board. The other thing that they do really good at is the ability for the customer to see where the crew is at or the tractor is at on the map. That's really solid for snow because the number one request you get for admin on snow is where you got where are you at? Where are you at? Where are you at that. And so that saves you a lot of admin time. So you know there's pros and cons

of both and the texting would be the number one, I'd say. It's like we text our clients before we come automatically the map there.

Yeah, that can happen at homeworks. Most softwares can have that part. I was talking about kind of like the main features I see Aurora being really good at in terms of snow.

Cool.

All right, awesome. Thank you.

You got it, Ian and then Christian, then we'll call it a day.

All right, last one here for you, Mike. We have a part time admin currently and hopefully bringing her on more out of a full time capacity this spring. Currently she does probably 15 hours a week, I'd say on average. But I really think at full time she's probably not doing more than 25, 30 hours. So it's going to kind of do a hybrid role of half admin and half commercial kind of cold outreach for our commercial sales. And basically what we're trying to integrate P4P this spring.

What's your revenue again?

Just over a million.

Okay, cool. And. And how much is that? Is commercial?

Probably 40%.

Cool. All right, sorry. Good. Yeah.

Looking to grow the commercial side because it's more reoccurring or recurring. So bringing her on with more commercial outreach kind of boost that recurring revenue. Looking for KPIs, what you would recommend for KPIs for pay for performance, for admin role. That's half admin, half sales oriented.

Personally, I think you can afford her at your size and what I mean by that is the extra 15 hours a week that she's not working right now. I think that she could take stuff off your plate and it could be sales stuff like cold outreach. But I would first, before I say, hey, let's go to this new thing I cold outreach to commercial customers that we've never done. I'm assuming that is that correct? Have you not? Yeah. So before we go to that new thing, let's try to do a better job of getting things off of your plate or manager's plate in operations first. So like I would be looking at every single thing you do. Follow up phone calls, any sort of communication with customers, putting spreadsheets, reports, anything whatsoever that she could potentially take off your plate. I would be trying to do that first because you know that's going to be a return on investment. We do not have a. We do not have a guaranteed return on investment for her doing outbound. So I would first focus on what things could go off of the other people that cost more in the organization off their plate, move to hers. Guaranteed ROI 100%. Then I would Think about, okay, what else can we put on her plate in terms of outbound? And then that's like a whole in their conversation of how do we outbound, how many calls per hour do we incent based upon the gross value of closed contracts? Those are the type of things you could be con because that's much more sales side of things. The KPI is around number of dials, number of contracts sent, and then giving a commission on percentages, for example, that would certainly be in the cards.

Gotcha. So you think if she takes stuff off my plate, it'll allow me to start that kind of cold call outreach program and figure it all out.

And then almost anything you do besides whatever she could do for you is going to be a higher return for the business, even if that means better training your team and better hiring and onboarding with them. That is a higher value than whatever you're doing that she's going to do for 25 or 30 bucks an hour.

Gotcha.

So anything, literally anything off your plate first, then I would, if I was you, I would take that some of your time that you get back and figure out the outbound yourself before you hand it off to her. Because otherwise you're gonna hand it to her and it's gonna fall flat because she doesn't know what she's doing. She didn't know how to. She does not have the power to change the system.

For sure.

You would rather put in front of her a script and say, do this 1,000 times out of a thousand. You're gonna about 20 people responding, 10 estimates and 4 acceptance like you knowing that, then you hand it to it, it can succeed.

Perfect. Sounds good. Thank you, sir. Appreciate your time.

You got last but not least, Christian Malia, our couple of the week. Let's go.

Hey, Mike, we're back. So does P4P work for the owner?

It can. If you're out in the field working, you can certainly pay yourself that way. Typically, it's not so much a matter of if it works, because it does. If you're out in the field producing labor revenue, it was. Where it breaks down is from a tax perspective, like, is it best to be paying yourself a whole bunch of W2 income and paying a bunch of taxes? If the business as a whole is making 40 or 50 grand in profit a year, probably not, right? If you, if you, if you have very little profit and you're taking a whole bunch of W2 income, I wouldn't, I wouldn't make that move. And so this would be much More conversation with your accountant in terms like what form of payment is best for me tax wise. Should I be taking more W2 or should I be taking more distributions? Usually going to depend on the profitability of the business. The more profit you make is distributions that's going to be taxed less than a W2. Actually. Wait, are you in Tennessee?

Yes.

Okay. They definitely talk to your account. Tennessee has a bit of a weird thing with their S corps. Are you in LLC right now?

We're an S corp and we've, we're both on W2.

Okay. So definitely talk to an accountant. You just want to nail this down because Tennessee is actually the one stays a little strange on this thing with the S Corp thing. But they're, they should have good advice as to should you be getting more W2 income or do you want to be having more distributions? The other thing I would say is once you take your W2 income out, how much is in profit right now in the business? Not a ton.

Yeah. No, not a lot.

Yeah. Well, sorry, you're paying yourself essentially and in working for the business, that's fine. So definitely talk to, talk to an accountant. Because traditionally I would say let's, let's not pay yourself W2 where you're paying 30% of. Of income on taxes. Let's get some distributions in S Corp and not have self employment tax. But Tennessee has some funky stuff going on. So talk to an accountant that knows that stuff. If you don't know an accountant, go into upwork and find an accountant that is a CPA inside of Tennessee and do a consultation with them for 50 to 100 bucks in 30 minutes. They'll answer all your questions.

Okay.

Okay.

So but should we even do P4P since it's just going to be him and his brother, or should we hold off until we have more employees?

I want you to nail budget hours first. So now budget budget hours. If you want to watch the P4B course, the number one thing I say is if you're not going to do P4P from the get, just make sure you don't give anyone an hourly wage above what your base pay needs to be. So what I mean by that is like what's your hourly. When I said target hourly rate in Malia, you were like, oh yeah, I'm doing it right. What was your hourly rate? What's that number?

100 an hour.

100 an hour. Great. So in the P4P book, you'll or the book or the course, you'll hear me say the 25% rule, which means the, the, the base pay up to the employee has to be less than 25% of that number. So I'm going to go on a limb and say you guys pay 22 or so an hour for entry level employees. 18, 20. Oh, fantastic. So you're like at like fantastic. You're 18% instead of 25%. So that's excellent. I would try to make sure, like, what's your brother getting though, Christian?

He'll probably be getting 20.

Cool. That's fine. That's fine. You're still beating the 25% rule. So I would just make sure you don't let anyone go above 20 because then when you do P4P, there's a good chance your base pay will be 20. And it only would be upside for your team. And no one will have any problem with it, including your brother. He'll be like, let's go. I can make way more money now. And you will be able to pass the 25% rule. 20%, let's go. But that assumes we're hitting budget hours. And that's why I want you to focus on budget hours. Like get budget hours on every job. You'll see it on the dispatch board and homeworks. Like, it'll go red if they don't hit budget hours. You'll be able to see which jobs you're not hitting budget hours. Those are the ones you'll have to adjust prices on to actually make sure you're hitting $100 an hour. Because then down the road, when you do P4P, you'll have a lot of confidence and your numbers are making sense. But for now, let's really focus this year on getting budget hours on every job. Every visit, every meeting, every to do. Everything has budgeted hours.

Okay.

Okay. So essentially like spring rush is around the corner and like we get a lot of rain here, like at least for one week. So for that period, do I look for like a part time or maybe another full time employee or to like help us kind of push through that?

Well, it sounds like we're going to get a second truck. Is that kind of what we're thinking? So continue growing.

That was the plan.

I mean, that was originally the plan until.

Yeah, we talked to you kind of. Well, the thing is you could hit the. Like, you're pretty close to the capacity of the one truck. Right. So you could go into profit mode. Now this is a conversation between the two of you in terms of how much cash do we have on hand and are we Wanting to go into growth mode, get the second truck, or are we going to stay at one truck and go into profit mode this year? That simply comes down to how much cash you have on hand right now and how much you both have in terms of risk. If right now you're like, hey, we don't have a lot of cash and it's pretty stressful, I would stick with the one truck. I'd raise prices, I would go into profit mode like we talked about. But also knowing that the only way to get to your long term goal is for you to grow, grow this business.

Yeah.

And so if you're both like, hey, let's go ahead and like, we're gonna live skinny a little bit for a second, but we're going to get the second truck. By doing that, Christian goes in that truck and get another person to help him. Potentially that leads to a full time employee. Like, so that would be the growth way, right?

Yeah. Okay. We're also, we also made a plan of like creating contracts this season. Like a 12 month, not fully like jumping into it 100, thinking about it like 60, 40 and then keeping the 42 like monthly. Is that a good plan or.

I think you have a lot on your plate right now in terms of changes that need to happen. And so like even on the onboarding call we talk about this. Like, I think you can make maybe three good changes in a business per year. And so right now, like I'm, I'm, I'm winning budget hours in every single job. I need Malia to Great system around admin and you're potentially getting a second truck and you hiring a new employee. Lots of changes.

Yeah.

Do I think we should throw contracts into the mix? I would focus more on getting the amount of recurring revenue this spring while it's coming in. Just get it. As many customers as possible. Going into off season, we're going to focus on winter services, converting those recurring customers. You're in a perfect market for this, by the way. You're converting those recurring services into recurring for the winter, not just the mowing season. That's low hanging fruit next year. Think about contracts and it might not even be something you think about once you do winter services and realize you can keep most of your customers if you pitch it right for the off season. Two.

Yeah. So now there's an issue kind of right there. So we start Christmas lights.

Oh yeah.

We can start it early October if we want to. But then we come across like not having the manpower. And if like both crews are going to be doing lawn carely. What are aerating and all that? Because it gets really busy around that time, we can't really start it until like almost mid November. And it just, we lose a lot of money during that time for Christmas lights.

Yeah. So you just pull demand forward. Right. So instead of people doing them in October, you're like hey, you can send a text message or email to all your customers beforehand. Tried doing it September.

Right.

You're trying to pull that demand out of that busy season. Or there's some people that like great, we'll do your cleanup in December. And so we send out messages. We don't do it this month, we do it a different month. Say like hey, if you don't get your, your stuff done here in these next few weeks, your, your, the next available time is this. So basically that November period or October, whenever you're really busy for Christmas lights, you don't schedule anything. And you tell your customers three weeks prior to that say hey, if you don't get your work done here, it's going to be out six to eight weeks. So you want to push demand away from that time so it makes room for the profitable service of Christmas lights.

So if we have two. Sorry, I'm. If we have two crews, the plan was kind of to have the first crew as like strictly mowing and then like they would have the best routes and all of that. And then the second crew would kind of help with rain days and do the more one time services and have a couple days of mowing but not like a full schedule. Should we.

Oh, you're good. I'll say this while you remembering that will work at the beginning, as you get more recurring, it's going to all shift. This is why having simple services where you can cross train people easily is good because you're going to get all these mowing in spring and all of a sudden instead of two days a week, they're mowing four days a week. The second crew. Yeah, right. So just don't get that too stuck in your mind because that will work at the beginning. But as you go into a spring rush and you're likely going to double in terms of size, all of that changes very quickly. So just don't get that too stuck. Think much more in terms of budgeted hour capacity.

Okay. But like in that sense then who would do like the aerating and the Christmas lights?

You're going to look at the weeks where you know that's going to get happen and you're not going to allow Any other type of job on that schedule. So you're going to. So for example, people like I want fall cleanups. Great. We're sending an email the month before saying we have two weeks from this date to this date you can do spring cleanups. Otherwise you're in December. So you can pull that demand forward or push it out, but you don't, you don't do a first come, first serve basis up until the time we're like, oh, I were to have no room on the schedule. You have to prioritize which leads and which services you're going to do at certain times of the year. So for example, we will not do a one time project at all at my location locally from April 1st till the end of May. So basically April, May, no one time project at all. Because I know we're getting pouring in with mowing customers and I want to prioritize that them. So we sent a message out to everyone in February saying, hey, if you want your spring cleanup done, do it now, otherwise you're waiting till June.

Yeah, okay. Okay. So but like when aerating starts, we just wouldn't mow. Like if we have that many aerating customers or like same thing with Christmas lights, would we just stop mowing to do what?

No. So when do you do aeration? A bunch.

Mostly October. October is like a super busy month because we are still mowing. We do aerating and then we can also start Christmas lights.

Lights.

Cool. And so what I would say is like the first two weeks of the of October, all our aerations, second two weeks, all our Christmas lights, meaning we're going to do our mowing and that's it. And there is no other product. No cleanups are getting in, no leaf cleanups are getting in, no one time project, no mulch installs. Nothing else gets in in October.

Okay.

So we sent a message out in September, the second week of September, saying, hey, for the next two weeks we have room on the schedule. Otherwise we're booking out towards Thanksgiving. If you want to get on the schedule, let me know. So you pull as much of that demand back into September. Then you go through October, through your busy season. And if someone calls in the middle, the second week of October, like I need a property come. Great. We're booking out into November because what

happens all the time is that mowing we always, we kind of like separate both businesses and we like think about, stop thinking about mowing. And we're like, okay, let's shut down mowing and then let's start a Christmas Light. And then the Christmas light is going to be for like from November to January pretty much. Even though I know we don't do any holiday lighting, like the third week of December, but it's usually how it goes. And then we stop mowing. We stop doing any leaf cleanups. But wow. I know we probably could pick up cleanups and we could still be mowing. Yeah, we could still be mowing up until December.

Yeah.

We just don't.

Yeah. So it's, it's just really a matter of prioritization. Right. How many budget hours? You like this. By having budget hours, this becomes a, like a guessing. It is a math game. It's like, okay, how many budget hours of Christmas lights do we have? Okay, how many hours of aerations do we have? Okay. We know exactly how much employees we need to be doing those tasks. Okay. Do we have enough room for mowing? If not, do I need to temporarily hire someone for a month to increase my capacity short term or can I just move jobs out of that month to make room for the cruise? Because I don't want to be letting go of recurring mowing for an extra two months because I got busy. I want to keep that. That's like locked and loaded. But anything on top of that, there might be a chance that you hire someone part time for one month and you pay them extra so that you can increase capacity by 30 or 40 budget hours and get really high margin services on the schedule. But we don't know that unless we know how many budget hours and we know how many budget hours are above capacity and we can fill their schedule. So I believe by figuring out budget hours, by the time you hit this time in October, you will have a very good understanding of how many budget hours do we have for mowing, how much do we have for aeration, how much do we have for Christmas lights? And then do we have any leftover it. Oh, no, we're way over capacity. We will need to hire someone part time or full time for six weeks.

Okay. It's a lot of information.

Yeah. That's why we're not going to do contracts yet.

Okay.

Want to say thank you to everyone for hopping on. I love you all. Hope you have a fantastic weekend. A great 2,026 ahead. I look forward to seeing you guys around. Take care.