How to Work ON Your Lawn Care Business | Questions and Answers

Mike Andes answers questions from lawn-care business owners about scaling without getting stuck doing the work yourself. He covers pricing before you hire, why Facebook ads work for this business, and how to build systems that let you step back.
Questions this video answers
At least 20% net profit margin.
About 26.7% of revenue (LMN industry average cited).
Target homeowners aged 45 and up.
About $40,000 to get started (larger budgets like $150k enable faster expansion).
Raising a $30 mow to $40 per mow — the $10 increase yields a 25% profit margin on the $40 price.
Chapters
Video Today on the landscape business course group I asked for questions, anything I could help you all with. So got quite a few of those. So I'm going to see how many of those I can just go through as quickly as possible and I'll just read them through. I haven't actually seen them all yet. I just know they I just posted a couple hours ago. So if you're not already on the group, make sure you check it out. Landscape business course, just the Facebook group. So get on there and you can ask ask those questions. Occasionally when I add ask for them and so I'm gonna go ahead and just jump right in and get through as many of these as I can. I'm gonna be brief on the answers just to save time and try to get through all of them if we can. So I'm gonna start off right from the top. I just posted this a couple hours ago and I'll just go through these questions. So Joseph asks how do I start working on my business instead of in my business? So Joseph, if you're listening to the podcast, if you read zero, turn the book, that's gonna definitely point you in the right direction. Start working on the system, the procedures, the course helps a lot with that. If you've been to the conference Proplus, that's all we talk about in Proplus really is creating systems and systematizing your business. It's what I have done for the past year for Augusta Lawn Care and even going even further and deeper in now because I'm really trying to step out of day to day. So to do that, to step out of the business completely and really be a silent partner, you really have to create systems and procedures and work on the business. And so that encompasses a lot. And that's really what I talk about in Pro plus. But if you get the course, the book talks about it, read books, things like that, you can really figure out systems and procedures and every single aspect of your business. Like we talk about in the course, every single aspect of your business should have a system from hiring to the marketing and having, tracking the numbers for each of those things, what your customer acquisition cost is, how that funnel works. All of those things should be systematized and have numbers behind it. And so how do you start working on your business instead of in your business? I would just say that you should educate yourself on the systems and procedures to make your business run with or without you. Matt took the words right out of my mouth. James asked, trying to hire my first full time guy. How do you get yourself in the mindset of going from an employee yourself to more of the management role and stepping back. My biggest problem is I enjoy the work so much, but know that if I want to grow, I have to step away unless needed. Trying to get over the scare of that, building it up and having that person quit and then I'm in a deeper rut with double the work and no person help. So, James, definitely fear of hiring a first person is.
Not something easy to get over. Once you have a lot of employees, it's not so difficult. But I understand that first person is super integral, super important. I talk about that first person being very important for your trust and really to make sure it's a good experience for you as an employer so that you aren't afraid to hire people and you do trust people going forward and realize that there's going to be people that.
Abuse that trust and you're disappointed in. At the end of the day, you have to create a business that has enough margin to be able to afford an employee. And I feel like the biggest issue that people have that go from solo and have a few employees and then retreat back, the biggest problem I find is that they think that because they're making money solo that they can just get employees and make more money, when in reality they need to make a business that is profitable enough to sustain the employee's wages and still make a profit. That's the only way it'll scale. And so the biggest issue I see is people that are charging 30 to $40 an hour making good money by themselves. But as soon as you add an employee to that, with taxes and everything else like that, and more overhead, another truck, stuff like that, they just get wiped out and they get burnt out. And. And so my biggest thing would be make sure you have a business that's profitable enough and you're charging enough hourly to be able to compensate for that. And so I guess that kind of ties into even why A lot of you have asked since my last video about why I'm franchising Augusta. And it's really the biggest reason is to help that solo individual scale that business up to the size they want. And usually that's 5, 6, 7, 8 employees for most people. That's where they want the size of the business to be. But a lot of people will get two, three, four employees and are treat back to one because they aren't charging enough. And so by franchising Augusta, we're giving people the website, the forms, the uniforms, the logos, the branding, all of the systems in place, the follow up automations, all of that sort of thing. We're giving that all to them to make sure they can charge 60 plus dollars per hour from the get go and create a base solid foundation to be able to scale the business and not have to retreat back to becoming solo. So another question, what are the first steps to getting to scaling your business and hiring employees to get bigger jobs? How did you handle that? Did you have previous experience? So this is something that I've talked about, I think I mentioned a couple times recently. If I could change anything in what I've done with Augusta Lawn Care is I wouldn't have added so many services so quickly. I would have waited a while, I would have just focused on mowing, just would have focused on weed control, really basic stuff, cleanups, trimming, and then really just dominated that before I started adding so many other services. We're in the process of cutting services out right now and we're doing that to make a more scalable model, a more efficient model, A model that every time we go to a job, we know the profitability, we know the numbers just like the back of our hand. We, once that job is sold, I know exactly how much we're gonna profit on that job before it even is done. And that wasn't always the case. Even a couple years ago when we were growing really fast and adding services and adding different types of hardscaping, our turf installation, all these tree work, there's so many areas you can go into that I feel like a lot of times when we were just getting started, we'll just take anything for the sake of getting more revenue. And as you kind of hit a point where you actually have to not scale back, we're still growing in terms of revenue this year big time. But in terms of.
Growing how many services, we're actually taking it back, we're scaling back how many services we do. And so I would recommend, don't get too enamored with adding bigger jobs or bigger services. I just talked to one of my local competitors here recently and he's wanting to get into hardscaping and big projects. And I said no, I would really recommend trying to figure out the small job first. Because if you can't make money on a $40 mo, how do you expect to be able to manage a business on, on a $40,000 project where you can lose your shirt on it? And so before you get hiring employees and trying to think about bigger jobs, really focus on how do you take yourself doing small Mows and make that really good. Then how do you make it where you have employees doing smaller mows and make that really good? Okay, then maybe you start adding some larger properties for mowing and for maintenance. Then maybe add some commercial properties. Then maybe you get into some cleanups and tree trimming. Maybe then you get into hardscaping as your business grows. But when I say like that, you should be a seven figure company before you start thinking about too much diversification. But you can be a jack of all trades and do 100 grand in 10 different types of services and not make a single penny on it because you need so much equipment. Your people have to be so incredibly trained and talented and you have to cross train them in so many different areas. You don't, you have a lot of callbacks, you're never proficient. Like there's not efficiencies because the guys are doing so many different things. So I'd really focus on getting good at the small, get good at doing those things well, the small business, running your business small, get well oiled there and then begin to grow that way is my opinion.
How do I prepare for an economic crash? Have you struggled because of the economy? How did you handle that? So Joseph, I didn't ever live through 2007, 2008 as a landscaping company to my size. I was just doing on the side still and going through college. So I don't know what it's like to be in an economic crash. So that just being said up front, what's interesting is look around your local competitors and there's very few of them, I would say less than 10% of them that actually were landscaping before 2007. And that's because.
So many people got wiped out during the recession. And so it's something that at the last conference we really dove deep in, talked a lot about is what's gonna happen. I don't know if that's in this, you know, next 12 months. Is that three years away? Is that during election year? Is that five years, 10 years? I have no idea. But it's going to happen eventually there's gonna be a recession. And I hope that 2007, 2008 does not repeat itself for the landscaping industry when so many people got wiped out because their business were over leveraged and just a whole myriad of things. But I have not actually lived through it personally. So how I handled that haven't been able to, I can't comment on that. In terms of how to prepare for that. You can look at certain trends and things that happened in 2007, 2008, and learn from those things. And so we talked a ton about that at the last conference and it's probably something we'll talk about even a little bit on at the next conference in 2020 because it's gonna happen. Like I said, don't know if it's a year like 2020 is gonna be an interesting year because it's election year and all that in the US that has political and economic implications. But it could be five years away, the next recession hits. When that happens, the 10% of people that make it through in the landscaping industry are the ones that become massive businesses later down the road because you can actually capitalize on it. So that's what we talked about at the conference. And there's a video or two, I think on YouTube and Facebook that I posted in the past couple months that kind of were just pieces, snippets of the conference about that exact same topic of the recession of things. What skills do you have or have acquired over the years that helped you in business? Just trying to learn a lot. So when I was going to business school, I would be going to class from 6pm till 10pm and throughout the entire day. At that time I was solo mowing. And so I'd listen to audiobooks around business the entire day. And then I would go to school from six to 10 professors classes, all of that around business. And then after that I'd do homework until 1 2:00 o' clock in the morning. So just it was just like soaked in me for learning about that. And so I think becoming a student of business, becoming a student of our industry is really important. Becoming a student of marketing and really imperative and being able to just be.
Aware enough that we don't know everything. And I'm still learning every single day is very important in this industry, in any business in my opinion. Carlos asks, how do you Prepare to work 100% remote? I will be living abroad. I use Service Autopilot and use automations, any automations you recommend. So for those of you that know I use Service Autopilot, I've used Lawn Pro in the past when I was smaller. Both of those, those products have automations which basically allows you to send things, send emails and phone calls and make to DoS and emails based upon certain triggers, like when an estimate is sent or when somebody does some sort of action or you put a tag on them or whatever it is. And so Carlos asked, how do I Prepare to work 100% remote? Carlos is part of our Pro plus group. And, and I'm moving my business right now towards a place where I'm 100% remote. Not remote, so locally living here, but 100% not involved in the business. And so we're still, we're taking steps to that every single day. The next big thing that we're taking steps towards doing that is creating a pay for performance based pay system instead of an hourly system. It's not easy, it's not easy to switch but, but it's something that's really important if you're gonna create a sustainable, very predictable business model. And so that's something I'm doing. I've also put in place management now that would be able to run the business on a day to day basis without me being there. And again, a lot of that isn't really possible until your business is of size and is profitable enough in terms of top line and bottom line revenue to be able to sustain middle management because they're not cheap and they're usually an overhead expense. So in terms of how do you prepare for it? Number one, build a business that's profitable and big enough to sustain middle management. Then create the systems and procedures that run the business without you being there and then create systems in terms of pay structure that incentivize everyone there to make sure the business is healthy, growing and profitable.
Another question. I am 16 years old. What can I do now at my age to build this side hustle into a company? So Joseph, I would again learn, learn, learn. I would perhaps go work for another company out of your local market and learn the industry more.
Yeah, just be absorbent of education, learning everything about this industry and not just the mowing and how to fix mowers but like the business side of things is really important. George asks. George Cortez. Hello Mike, Love your content. Oh, this one's a long one I think. Whoa, whoa. Long. Okay, this is a long question. I haven't read it yet, but it's long. Hello Mike, love your content advice on growing a successful landscape business. You've mentioned a key component of building your landscape business is due to Facebook advertising. What are the demographics you use in Facebook advertising to market to highly qualified homeowners for a massive lead generation funnel such as income, marriage status, interest and other to hyper focus on dominating your local communities. Also, any specific books you recommend? Okay, so I think this is going into a different question. So first of all in terms of Facebook ads in Pro plus, I did our whole first session in February. It was a couple hours long. I went through all nine Facebook ads that we ran this spring, all of which did fantastic, we had a great customer acquisition cost. We ended up having turned the ads off because we were so busy and the staff at the office was just overloaded with leads. And so we ended up stopping the Facebook ads. But there's a variety of different demographics. Obviously for us, 45 and up is a very key market. But then within that we do segmentation and are really not so much interested in income levels and things like that as much as.
Making sure that when they see the ad, the creative, the text, I want them to say one thing, and that is that's for me. And so what can I do in the targeting and then mirror that in the text and the image or the video to make sure that they realize I'm addressing them specifically. So whether I specifically say their neighborhood or their I specifically talk about being a grandparent and I'm able to target them in that way. I want them to be like, oh, that's interesting. That adds for me because it's talking about being a grandparent and I'm a grandparent. So I target grandparents in Facebook and then in the text and creative talk to grandparents. So something like that. And in Pro plus, we talk all about that and I show you the ads. Okay, so George continues on also. Any specific books you recommend to learn how to build, sustain and grow Funnel for Unlimited Lead generation.
The Ultimate Sales Machine by Chet Holmes is pretty good. It's okay. It's just one I recently read. There's a lot of really good books. But let me keep going here if I may. How about Instagram and LinkedIn? So in terms of Instagram, you run all those ads through your Facebook ads manager and as long as the video is under one minute, you can run that same video ad from Facebook on Instagram.
LinkedIn is something also I'd be interested in if you're in especially if you're doing commercial work. That's really interesting because you can target the people that work in maintenance divisions for big companies in your local market. So if you're really into commercial, LinkedIn is a big place, I think for you.
See here where it was more questions. They seem to be. They seem to be platforms that would be wonderfully in our business if proper lead generation funnels are built. I may stay in my lane and hire Pro to do it, but I want to make sure I know how it's done to make sure it's being created and operating successfully. Too many Facebook ad pros say they're Good. But always want to increase advertising budget and their cost for results after two or three month period of time on the job. If you have time, how about the content to market and remark if you have time, how about the content to market and remarket to highly qualified people to entice them to call you. Thank you. And keep crushing it. Like Gary Vee would say.
Just trying to look here. So in terms of Facebook ads, I would educate yourself and do it yourself instead of hiring someone else. Because when it comes to like an ad agency, typically they're going to charge you a fee up front, which is not super bad. But then say you want to spend $20 on Facebook ads, they would then take another $20, like a 50% split. Another $20 would go towards them as the agency just for creating the ad, managing the ad and all of that. And so I don't really like that because that means basically my customer acquisition cost is going to double now if they're so good and they can reduce my customer acquisition cost by more than half and they're taking half for a fee, maybe that's important. But I feel, I feel like it's just a vulnerability if you don't as the business owner don't know how to do these things. Like if you just spend eight hours watching Facebook ad videos on like how to's on YouTube, read a book or two about it, listen to some of the podcasts I've done over the past couple years on it, like it, it'll pay huge dividends. So you know, I truly believe that 5 to $10,000 in Facebook ads, I can get your whole. In someone's entire market to know who they are. Just completely do that. Like I just know that for a fact I can have people recognizing me on the street. If I spent, if I spend three to four thousand dollars on a local, very targeted area, like it just, it's a powerful tool. I feel you need to know it. And that's why I actually have not opened up to ever. And I will never take money like an agency would and then make someone's Facebook ads because I feel it's so important that you do it down the road. Maybe for big businesses, I think was that's just not, I'm not even thinking about right now. I'm focused on the franchise. And for them we would create systems and procedures for Facebook ads that work and convert and run them through that. But it'd be part of the franchise. Like I'm never, I'm not gonna do it for outside people. Yet because, and that goes into the question, would you do it for me? And it's like, no, not right now. Definitely not. The franchisees will get access to everything that I do and Pro plus members see how I do everything. And I would just highly encourage you. Just educate yourself. I don't care if it's Facebook, LinkedIn, whatever, the next thing is, Instagram ads, whatever it is, just educate yourself and spend the time to do it. And if you're not going to, yes, you're going to have to pay that middleman to, to do it for you because you want to make sure you know what you're doing. You can waste a lot of money otherwise. Jeremy Law, what's your thoughts on scaling primarily a maintenance side business of seven figures while also working another full time job as a firefighter? Shift work on the fire department are 24 hours and then 40 off. So Jeremy, I wrote a video, just search it on YouTube or Facebook about how to grow your landscaping business on a part time basis and so watch that video. But basically I would just really focus on density so that when you are working on the side, you're making really good money. And I would also use the fire department thing as a marketing tactic as well, make sure people know about it too, so that there's flexibility in your schedule and things. But I think this again is partly, you know, for the franchising thing that I'm doing, this the ideal sort of person that is wanting to grow their business on the side and they need the systems and procedures to sustain that while they're still working their regular job. So yeah, firefighters, teachers, because teachers usually have the summer off. Like these are really things I'm really interested in. How do we make them, how do we give these service people an opportunity to have a side business that makes really good money? And so I would really focus on density, Jeremy, I would really focus on density. I would focus on referrals within that market. I would focus on just three or four services. Mowing, weeding, bush trimming, fertilization, keep it small, don't get involved in big projects because you don't have the time to knock out a two week job all at once. Just get very focused on that. And then once you have enough work where you're completely solidly busy, either a jump out of your job, but if you like doing that, it's totally fine. Hire someone, make sure you have the systems in place.
Where they're going to be able to do the work correctly and make sure that you build a profitable enough route or business to where they can do that and you still make a profit after their wages. And then that's just how you continue to scale that way. Jenny Lopez Guzman commercial bids dos and don'ts. So commercial do's and don'ts don't. I'm just reading these and responding. First thing that pops in my mind when I come to commercial don'ts is don't get into it too soon. Don't get into. Everyone for some reason thinks commercial is like the holy grail when they start their business. It's not. When you're small and new, I highly recommend you figure out the smaller properties before you try to get the bigger things. And there's a lot of you need more manpower typically. So my first don't for commercial is don't get into it too soon. Another don't for commercial would be don't reduce your hourly man labor rate just for the sake of being commercial. And if you're going to don't do it by a lot, don't go from $60 an hour on residential down to 40 simply because it is commercial. Maybe 60 to 50. But I feel like too many people because it's commercial, they bid way low to get the work because they're usually in competition and then they end up on these properties where they're doing a ton of work and they're not making any money. Like, if you're not going to make money in this business, why are we. This is why we're here was to make money. And so if you're going to be doing low profit margin work or work that you're losing money on, you should drop that stuff, get rid of it, or figure out systems and procedures to make sure it's profitable. So, yeah, that's my do's and don'ts. Chris. Chris Corfonta I want to franchise our business within three years from now. Oh, cool. Is there an annual revenue total or net profit percentage that I should be going for before even considering we have 30 employees and a couple million per year maintenance revenue? I understand that's a loaded question. Love your videos.
So if you want to franchise your business. So, Chris, you're in the kind of area we're in. I'm franchising my company. First of all, if you're wanting a franchise, it's not an easy game, I'll tell you that right off the bat. But in terms of revenue, you need a net profit margin of at least 20% for your model. If you're gonna franchise, that's pretty Traditional. And that's what I would recommend.
Yeah. So in terms of annual revenue, I'm not super like, so when. So we're franchising Augusta, I'm targeting a demographic that actually start their business out of their garage and have very little overhead. Start with solo mowing. They could hire a couple people if they have the money, but it's not necessary to start the business. And.
The model is going to be very, very systematic. And it's going to be very much like start with one, one mow truck, get a very systematized route, and then just scale out slowly like that, using maintenance, residential maintenance.
And so if you're, Chris, wanting to franchise your business down the road, I wouldn't focus so much on annual revenue. I'd focus on a business model that makes a 20% profit margin or more business. And then.
Yeah, like that's what I would say off the bat. And then people are going to be attracted to your business model based upon how you present it. So for example, for Augusta, someone only needs $40,000 to get started with us. Now, if they had 150, they could probably get a few employees, a couple other trucks and really go big from the get go, but they could start smaller. So I wouldn't focus so much on annual revenue. I'd focus on a net profit margin and that would be something that's marketable in terms of a franchise. Chris continues. He has another question. As your company has grown, have you been able to secure a profit for all months on a recurring basis? We're still struggling with one to two months each year because of the huge labor and material costs for Spring Rush. It hits the bankroll really hard temporarily. We make it back in other months and it's getting better each year. But I was curious to know if other established businesses experience this issue as well. Thanks. So first of all, a lot of landscapers experience this issue. As you grow in size in your business, that actually gets. It gets the higher highs get higher and the lower lows get lower. So the Spring rush cash flow deficiency, as I call it, gets felt more and more the bigger in size you get. So last webinar on Proplus, we Talked for about 30 minutes at the end of the webinar about cash flow and talk about all the ways to help your cash flow and in terms of like billing sooner and raising your prices and all those different things, how to do prepayment instead of like, why is it that we always require payment a month after? Why don't do prepayment things like that, that we were talking about. But Kris, there is always a certain level of seasonality in our business unless you live in certain states where it's year round. And so it's figuring out number one, can you use contracts, can you do other cash flow things, can you accept credit cards, can you charge invoice daily instead of monthly? Like so many different things.
And.
It'S gonna hit you hard if you have a seasonal business in the spring. Like I made that video recently about the spring rush and the cash flow issues that we have in our industry. And so we've done things like ad propl like ADD Pro labor services which is like a handyman services during the winter. You're able to, if you do commercial work, do services during the winter, do tree work, whatever it is. Like the one time that we diversify outside of our core competencies is the winter because we're trying to keep the guys busy and we're trying to make revenue to get by. And so if you have a cash flow issue, it only gets magnified as you grow in size and revenue and employees and all of that. And so I really again focus on the foundation, focus on the core small when you're like figure out the business when you're small and then as you grow, continue those same principles. Ishmael asked a question. Guys in our industry need more day to day lessons on running the business like record keeping, systematizing. Wish I learned and focused on business management first rather than focusing on plant identification, all the technicals things. Yeah, so that's, that's why I have this course, that's why I have a podcast, is why I'm doing this video right now. And I try to give you more the business marketing, hiring, that side of the thing because there's so much information and good information, better information I could ever give on plant identification, equipment maintenance, types of equipment. Like all of that stuff. Like that stuff is not hard in terms of teaching and like, like Ishmael said, like the, the lack in our industry is in the record keeping, the systematizing, all that. Some of the things I talk about in the podcast, it's very difficult to give you details like on record keeping for instance, because it depends on what type of software you use, depends on your market, things like that. So sometimes I can't get really specific, but I try it as much as I can. Amity Morales and asks how do you know what percentage of your revenue should go to employees? Making sure you're not over on your numbers keep employees happy. So first of All I would check out lmn. They are our software system. But I don't use them for software like invoicing or anything. I just use them for their budgeting. You can actually do it for free. Just do LMN software. Google it. You can do the budgeting thing for free. You can get how your numbers stack up against industries. Like the average in our industry according to LMN is 26.7% of revenue goes towards paying for employees. I find that to be higher in most businesses, especially ones where the owner is trying to be out of the business on a day to day operational level and depends on type of service and all that sort of thing. However.
What percentage of revenue should go to your employees, depending what you're doing in terms of like if you have a lot of material cost, that number is going to be like skewed lower. If you are doing mostly labor, that's going to be skewed higher. So it's hard to give you a percentage. But something that we're actually working a lot on right now in terms of numbers because we're switching over to a pay for performance model instead of bi hourly. And so this is something that we've been talking about a lot of. Thomas Salazar, what steps do you take to successfully break into a saturated market?
I like saturated markets because it means that there's a lot of business, there's a ton of competition. It means there's a lot of business supply and demand. And so I like it and I would say to break into a saturated or you know, market that is. What's the word? Yeah, saturated market. I would just make sure that you have something that's very different and then market, market, market, market around that one thing. Like what is the differentiating factor? That could literally be your logo. It can literally be the fact that you do a drug test. It could literally be the fact that you don't allow smoking the job. It could be the fact that all your trucks are labeled. It could be the fact that all your guys are uniform. Like one of those things, just take one and just market that. Just pound it. All your marketing material and all your trucks and all your website. Like everything that you push is above that one differentiating factor. So when people think about lawn care, they think about you. Because that one thing that's different, clean trucks, maybe it's pink trailers, maybe it's all our guys are background checked and we don't smoke on your property. Like whatever it is one thing, not everything, not all those things I talked about One thing, focus on it. Thing that makes you different than everyone else and just market, market, market. Everything that you do, it should be around that one thing.
Chris asks, how would you approach raising prices for recurring contract customers that are low margin? I'd say 5 to 10% of our customers each year need a price hike. I'm always worried about scaring them away by raising prices. So would like some thoughts on how you would approach that each year. I know it's not good to have low margin customers, but losing them makes our revenues go backwards. And I hate the thought of that. Thanks. So, Chris, if you're in the course, go to the very bottom of the module page templates and documents. In there is a document that we actually use, a letter that we send to our customers when we're raising prices. And less than 2% of the people who get that letter with a price increase less than 2% cancel service. So that'd be a good starting point. But the main thing is just be honest with them. Let them know that you're not making money in their property. Let them know they're out of your service area. Whatever it is the reason why you're raising the prices. Or just say, hey, look, we never raised your price before. You've been a bit. You've been a customer for five years. In that time we had to do X, Y and Z. That could be hiring more people.
Labor is so expensive. Now. People understand that your labor costs are rising, fuel costs are rising, insurance costs are rising. You just explain all that. Just like, make them part of the family, make them part of the business decision that you are partner in the business, make them aware of those things. And many times they're understanding you've done a great job, they liked your guys. It's not been a big issue to raise people's prices. And if you're not raising prices, I highly encourage you to do so. Literally, if you can take an unprofitable mowing customer that you're not making any money on, and if you're charging them $30amow and you're not making any money on them, they're unprofitable. As I'll get out, you give them a price increase to $40 per MoW, all of a sudden you're making 33% margin. All right, I'm sorry, 25% margin. If you mowing the MoW for $30 per cut and you're not making any money, if you move that to a $40 mow and you give them a price increase, that extra $10 is pure profit. That's 10 out of 40. That's 25% profit margin. 25% profit margin on a mowing job is really good. So you can really make an unprofitable client very profitable. In terms of.
Industry standards for profitability around mowing, which is typically more like 10 to 15%. You can really do that if you can get that letter, if you can get them convinced and if you can make them part of the decision making process and make them realize that in order for you to become a sustainable business and for you to be able to service their lawn in 10, 15 years and then not have to look for a new company every year in order for that to happen, in order for you to have a sustainable business, you need to have their price go from 30 to 40. For most people they are understanding. Kevin asks, how do you figure out how to change how to charge to sell a customer right out? Oh, okay. So Kevin asked this question in the Proplus group too and I told him that I'd answer it here. So everyone can hear this because we had our last webinars about acquiring businesses and selling your own business in ProPlus. And so Kevin asked this question as a follow up to that. So I told my I'd answer here. So Kevin asked, how do you figure out how much to charge to sell a customer outright to another company Ask. Because we are working on our routes and route density and some customers we have are a little further away from our shop than we would like. So what Kevin is saying is, hey, route density is here. We have customers in the periphery. We want to sell those. We don't want to do them because they're not in our route, but yet we want to sell them in another business. So what I would say on that, it's really gonna come down to who your buyer is because you're not selling them on business. You're just selling literally a contact information. And so I would start the bidding and this is what I told Kevin on Pro Plus Groups Facebook is I would start bidding at like 8 to 10 times the revenue per service number. So if you're charging $50 per mo, I would start the bidding at like 4 to 500 bucks. Try to sell that customer. You're not gonna usually get that unless someone's pretty desperate. Like it might go down to $100 per. It really depends. I would start the bidding high. I put together like a one page presentation to other buyer to other your competition. Make sure you tell them that you promise you'll never caught like a signing an NDA. Like they need to know that you're not just gonna sell them the customer and then you're gonna around their back and sell the customer. Landscaping jobs and other type of work that's profitable. And so make a nice one pager, send it to your competition, tell them exactly what you're doing, tell them the price per customer or whatever it is and see who bites, basically. And honestly, I've seen customers sell for 15 times their per mo price. If you're talking about maintenance, I've seen them go for literally one or two times. And so I'm not a big fan of just buying one or two customers here and there. I would never do it as a business owner, but if you find a solo guy that is really, really focused on a certain area and those are where your customer that you're trying to sell are, you might buy a few. And so this is a little bit different because we had talked about in the webinar for Proplus about selling your whole business, selling all your customers or selling all your equipment separately and all that. But in this case, when you have a few outside of your service area, I would put together a one page presentation, send it to your local competitors and ask for a certain amount per customer and see who bites. Because I've seen it all over the map. Just so there's really no number I can give on that, but that's how I'd go about it. One page document, send it to your local competitors, see who bites. So hopefully I answered all your questions. I know there's probably more questions even coming in here, but. But I'm just going to cut it here. So if you haven't already, check out Landscape Business course the group on Facebook. That way next time I do these questions and answers, you can hop on there and ask your question on how to grow your business. So thank you all so much. Hopefully you learned a.










