I Feel Like Quitting! OVERWHELMED! | Zoom Consulting Call

Hey, everyone, it's Mike Andes with landscapebusinesscourse.com and it is a very special episode. I've been super, super busy the past few months and really have not been able to create any cool episodes for you. So I kind of apologize. I wanted to make this one a little special for you. And so usually the only time I do coaching calls is with the franchisees, but this individual, Mark is his name. Today is going to actually be a live call where he had reached out to me last week and he was really struggling and just struggling with his business. And I wanted to see if we could record it. And so I asked him if it'd be okay if we recorded the episode while I was talking with him. And so this is just a straight recording of a zoom call with a landscaper. You're gonna see all his numbers, you're gonna see me break down his revenues and expenses and things like that. And this is really kind of like a 45 minute call, I think, similar to what kind of I would be with a franchisee on a monthly call. So I just need to make this disclaimer. I can't do this for everyone. I hate that, but I can't. Like, I just don't have the time. And so this really is just for the franchisees. I know I'll be asked a lot to have special calls, but I can't. I just don't have the time. I really wish I could, but between everything that I got going on, I really have to prioritize the franchisees. I just wanted to do this one because I wanted to create some content for you all. And I really thought this was a good call for you all to hear in terms of looking at your expenses, knowing your numbers, and running those numbers on a daily basis basis. And some really good. You know, there's really generic numbers I can throw around sometimes. And in this industry, you see ranges of how much you spending on employees or how much you should be making per employee. These are all questions that are very subjective to your local market, what type of services you do. But today I'm gonna give some, like, very concrete numbers for him. And I think it'll really help a lot of people. So I first of all really want to say a big thank you to Mark Hanson, being very vulnerable and just honest and open to me sharing his story and recording this. And I told him, like, it's gonna help a lot of people. So I really appreciate him just saying, yes, let's go for it. And it's okay to record this for everyone to hear. So kudos to him. A lot of people are not that humble. They do not have the stomach to be able to, you know, let other people see their dirty laundry, knowing that everyone has dirty laundry, everyone has made mistakes, everyone's been in the same position. And so if you could please comment below, encourage Mark. I do not want hateful comments. Obviously, we all have dirty laundry. Mark is being vulnerable enough to share that with everyone. So please, you will be blocked from my channel or anything if you start saying mean things like, this is someone that is struggling, obviously, but humble enough to share that with myself and other people publicly. Think about that for a moment. And you all, I have plenty of issues. And so please don't be hurtful, be constructive, say something positive for Mark in the comments below to encourage him. Cause we all were here at one point. We all had to get through this time. And so I hope something today helps Mark, and I believe it did. And I hope it also helps you. And with that, let's go ahead and jump in the episode. Before we do, though, one quick announcement, and that is if you're listening to this right after I record it, you might want to be interested in coming to Discovery Day. This is our first one. We're gonna do it every two months and where you can come here for one day and kind of get a tour of Augusta, the brand. We go to the training facility, we go to Command center, we go to the Bellingham shop, we go to the Mount Vernon shop. You get to see kind of how it all works. And if you're interested in becoming a franchisee, this is a must. You really would love to come here and see it. I know I've talked to so many people over the past six, seven, eight, nine months that are interested, but you can come actually see it in person, get to see myself, some of the team on a Saturday. So it's June 20, the whole day we'd start at 9am at the training facility. And I know there's one person that is already coming, but I haven't really announced it yet. So June 20, 2020, is a Saturday. And I'm gonna spend that day completely with you. I'm gonna take you around in the bus and make sure that you get a tour of the facilities and see if the franchise is something that would work for you and be good for you, if it's a good cultural fit for you joining Augusta Nation. And so if you've been thinking about becoming a franchisee, if you're interested in seeing our Shop and our location and kind of a one on one time with me. I'm gonna be with you the whole day, Pro9 to 5, take you out for lunch, take you out for dinner, have a good time. And more importantly, I think you'll learn a lot. So that's gonna be free. There's no cost to that. Down the road. We'll probably have to add a cost if there's too many people. But if you're interested in becoming a franchisee and you just wanna come here for a day, hang out with me, take some shop, tour, learn and consider the franchise, I'd love for you to come and check it out. So it's discovery day, it's June 20, and if you're interested in coming to that right now, like I said, there's only one person. So I think I could probably do about four or five. And beyond that, we'll probably have to start charging to bring that number down. Just because I want to be able to have some one on one time with you, really see if you're a good fit for Augusta and the culture that we built here. So if you're interested, just email me franchisegustalawncareservices.com that's franchisegustalawncaresevices.com that email goes to me and I will be able to make sure we have accommodations ready for you on June 20, 2020. We'll be having those every couple months, Discovery days. Really looking forward to that. Because I know a lot of times we can do calls and video calls and all that, but until you're here, you really get to see what we've built and what the culture and what our mission is behind trying to change this industry. And I think some of that passion comes out even in this call today with Mark. But that's really what everything we're doing@landscapebusinesscourse.com, and Augusta is all about, is changing this industry and raising the level of professionalism. And I'm very, very passionate about that. So without any further delay, let's jump into this. Calls about 45 minutes with Mark Hanson. Here we go.

But I'm basically just gonna give you, you know, the 30,000 foot view and see what we can work out, see what I'm doing wrong, what we can fix.

Cool. Let me for some reason my airpod down so you can hear me a little bit clearer. Okay, forget it. As long as you can hear me. Okay.

Yeah, no, you're good.

Okay. Awesome. So what's been going on so it's.

Been, you know, being the business owners of Roller Coaster Ride, you know that better than anybody. And so that's kind of just how it is. But for some reason, this year has been worse than it has in the past. So I was finally able to get out of the field this year for the most part. I've got two crews running right now, and I've got three full time guys and three part time guys. And so my lawn care crew is completely full through the whole week. My crew leave is working a full 40. He usually gets about 45 to 50 hours, give or take. And then everybody else kind of just fluctuates in and out. But my biggest thing is I just. I can't get out of the hole. I feel like I'm in a hole and I can't get out of it. So every time I start to get ahead, every time we start to put a little bit of money away, you know, every time we start to get good clients and everything goes smoothly, something comes in and messes it up. So, for example, we had our biggest billing month of the history of the company, and we billed close to 10, $12,000, give or take. And that was all gone in basically the week I got it.

Was that for May?

Yeah. Yep. So. And that doesn't include all of our landscape. I think we build like in total 16,000, but the way we just bill at the end of the month. And So I got $10,000 that came in off of that. And then it was like I was all excited because I was like, that's, you know, that's two and a half payrolls. I can put one of them away. I can pay off a few things and stuff like that. And I couldn't use any of it for it. Like, it all went to paying contractors and, you know, paying for repairs and stuff. I've got this truck that I. My problem is I can't. I don't think I can afford a loan on another truck to give to my landscaping crew. And so I've bought the used stuff. So, you know, you have to take, take what you get. And this used truck has issues, but it's just every single time I take it in and get something fixed on it, within a week, something else goes out. My mowers are the same way. I've got this older snapper and an older. I think it's a yazoo or something like that. And I just fixed a spindle, a clutch and a belt on the yazoo. And my guys take it out today and I've already got a pulley that shot on it and it looks like the other spindle went out. My snapper, they were gonna use it today and they couldn't because it wouldn't start all day. And so I told them to, you know, charge the battery or hook it up to the other mower and just let it sit for a second and try and start it and it won't start. And I just replaced the engine on that the beginning of this year. I just did the clutch on it as well two weeks ago. So I just, I feel like my wheels are spinning. I've lost my motivation. I don't want to go out to do estimates anymore. I don't want to go out and work anymore. I'm. And I've got health issues as well with that, but I've been able to manage those health. Like I've got Epstein bars and mono. The symptoms kind of, you know, come whenever I get stressed or whatever. But I've been able to manage it. I. All last year I worked 70, 80 hour weeks. And this year I just can't. There's days where I can't even get out of bed just because I'm so exhausted. I go to sit up and I fall back asleep and you know, all that kind of stuff and I'm, I'm just done. I really want to sell it and just be done with the whole thing. But I know if I do, I'm going to regret it because if I go to work for somebody else within a year I'm going to be sick and tired of working for somebody else because that's why I started this. And I'll be back in the same boat. I won't be happy and I want to do something else. And so I just don't want to be flip flopping back and forth, you know, I've got a girl that I'm trying to set up a life with. We're hoping to get married in the next two years and you know, buy a house, all that kind of stuff. And I just, I really want to make this work. I really want to stick with this. Just feel like I don't have the capital for it and I feel like I'm gonna go under, if not this year, this winter or something like that, you know, so, so, so let's.

So I just want to get a little bit information. So May 2020, 16k approximately in earned revenue, is that right?

Correct. Yep.

And then for 2020 total, what's your kind of guesstimate on what you do you'll do in revenue like 140?

We're planning on about 110, 120, I believe, if I remember my number correctly.

Okay, and then what are you paying on average for your employees in terms of per hour?

13, 14, give or take. My crew leads are at 14 and my regular guys are at 12 to 13, depending.

He's about 12 to 14.

Okay.

All right. And then what do you charge by the hour to your.

To your customers?

Our mowing is usually between 60 to 70 is what we try and bill. And then our landscaping, I've. We were, we started the year at 85 and I've just bumped it up to 105. And so we've, you know, estimates have slowing down at this point in the year, especially with everything else that's been going on, all this craziness. So I haven't had to a whole lot. I've had probably three or four jobs at that 105 an hour. A man hour.

It's per man hour. The 105.

Yeah, that's our goal. That's what we shoot for.

And when you say it's your goal for like, say 60 to 70 for the MOW, are you hitting that goal.

Or the mowing 90% of the time? Yeah. Springs always rough. So we've had a couple of rough weeks, but we haven't had a whole lot of rain here. And so my guys are usually sticking up on stuff we can usually get on Monday. Well, Monday's a weird one. Thursday, we have a list of 16, give or take clients. They hit that every time. And so they can usually do 16 and an eight to nine hour shift.

What's the kind of the average price per yard that you're charging there?

We have a minimum of 35 just to come out. And then most like a third of an acre yard is about 45 to 50. So that's our most average yard here is a third of an acre, a quarter acre.

All right. And then last year in total revenue, 2019, what did you do? Do you remember?

77 9.

What was it?

77 9. 77,900.

Got it. And so from this, from last year, this year you're going to probably grow about 50%. Was it the same way? Did you feel the same way though, last year still?

So our first year in 18, we did about 35. And I felt great just because it was me and like two other guys usually. Then in 19 last year I was able to hire a guy towards the middle and end of the year. So I would start. I was still working the 80 hour weeks, 90 hour weeks in the beginning and I was able to hire some people on and they took care of me fairly well. But this year's the year that we've. I've been out of the field as much as I can and I felt really good for the first three months. Like last year was horrible for my health and for me and you know, all that. This year I felt amazing up until the last month, month and a half and now I feel like I'm in that same boat.

So do you think physical, the physical like side of things is affected mostly by like just the financial like the pressure from all of that going on?

Yeah, yeah. We have more debt this year than we did last year just because of, you know, more equipment, that kind of stuff. And so it helped being able to be out in the sun and working and stuff like that. And I usually will get out and work in the field maybe 10 to 15 hours a week just for, you know, if they don't finish by 5 o' clock then I'll go out and do it or something like that.

But your debt like equipment then.

Yeah. So we have, we've got a truck, a trailer and an atv. All that we don't own that well that we're paying on basically. So those are the biggest things. I've got rent, but that it's not, it's really not very expensive. I don't have a shop or anything like that, unfortunately.

I was thinking if there's anything else, those are the big.

What's the total on that debt right now?

Just on credit card debt. Sorry. So between the credit card, the truck, trailer, all of that, I'm sitting about 24, 25. So the trucks about 8 right now the trailer's 35, the ATV is 67, I want to say. And then what am I missing? Oh, the credit cards about five.

So. And then I've got my personal credit card that I don't. Usually I pay that with the business just because anything that's on there is usually food for the guys and stuff like that. But I don't usually like I make the minimum payment on it because I'm, I'm. Right now I'm not taking any money because all of my bills come from the business. So I don't take, you know, pay or anything like that because even if I did it would go all go back into the business anyway. So it's just easier to keep it.

All in 2018 so because something's not adding up with the number. So for in 2018, when you felt good about it, were you full time during that time?

I was the same way. We started in May of that year and I was working the same 60, 70, 80 hour weeks, give or take.

Because something's not adding up. Because if you're having that high of a rate to the customer, if you worked a thousand hours doing mowing in a year, you should be doing more like 65, you know, $70,000 per employee.

Maybe. My guys are lagging behind and that's where we're. We're missing stuff.

Yeah. Are you tracking time right now or how are you working that?

The best we can. So yeah, I mean we don't track individual jobs. We basically we just track, you know, day by day. So. But I could, I could tell you pretty much about how long it takes each of our jobs. So I can show you if you want.

Say what, which software do you use right now?

We're using Yard book right now.

Okay, cool. Let's pull up like. So like yesterday was yesterday a pretty average day in terms of mowing or I guess the last Friday or I guess, yeah, today would work.

It rained a little bit Friday. If you want to. If you can open up your thing so I can share my screen, I can show you kind of our schedule and stuff like that and we can maybe that'll help me identify stuff that's going on.

So I'll just show you this whole screen. You can see what I see. So this is our regular weekly schedule.

And today, today it rained really bad. So my guys didn't get started for two hours late. And they still, you know, you can see they didn't get two of them done. But. So for example, last week, last week, see, we got everything done. There was two cancellations. Then this one, which actually got done. So it should be marked as done. But.

But yeah. So everything. So these are. Mondays are commercial day. And we usually don't travel about 30 minutes away from where they start at any given time. And it'll take them if they start at 8:30, they can get all of these ones done.

Usually before 5, 5:30. So the only one that's iffy is this last one because it's an apartment complex, but this is residential. These two are storage units. So it takes. This one takes them about 45 minutes. These two take them about a half an hour each. Rhett's is like 15 minutes because they just trim it. And then these five are a hospital complex and a strip mall. And I believe one Residential. Okay.

And I'm not super familiar with yardbook, but like, is there a way to see how much revenue you generated on that specific day total?

I'm sure there is. I haven't gone into the whole.

You're good.

I need to. That's the other thing is I feel like I'm just drowning in everything that I have to do. That's another. And I would love to. That was one of the things I wanted to mention to you. I would love to hire an office manager. I just don't think I can afford it at this point.

Yep.

So let's see. Reports.

So like, do you know, do you probably know the cost per mow on a lot of those people, right?

For the most part, yeah. Yeah. So George is about an hour of labor, just for example. And so an hour, you know, an hour including the drive time to get there and have my guys actually do it. I'm looking the 15 or the 14 for my lead guy and then the 12 for my other guy. So that's 20. What? Seven.

Right off the bat, let's select just the one day. We're looking at whatever day that is.

So for example, we'll go to the first.

All right, so yeah, so that's our whole day from last time. So.

Let'S just add them up here real quick. Do you want to read off on the job price estimate? Just read them off to me.

Yeah, for sure. 42.5 and then 15 and then 20 and then that one is 40. And then 145, 110. 95. 55, 45 and 40.

All right, so total revenue $607.50.

How many people are on this crew? Two.

Yep. At 27 an hour, give or take their wages. You mean both of them together? Yeah.

And then do you happen to have their time clock? Like, do you know how long they work that day?

I can, I can pull that one up.

So they both worked 8.74 and then take off 8.5 for lunch.

So 8.24, 8.24 each for each of them. Got it. Alright, so that's all I need. Okay, so if we take 8.24, multiply that by $27, you're looking at222.48 gross pay to them.

If we assume, you know, payroll taxes and all the rest of it, let's just say $250. But, but let's just look at gross pay for now. So 222, we divide that by 607.5, which is the revenue.

Point. 3, 6. 6.

Got it. So then we do.

So my labor cost for them working that day is only 36% of what we made.

Correct.

So is that a pretty average day?

Yeah, yeah, for the most part. I can show you the. The rougher day, which is.

Wednesdays. Wednesdays, they don't usually get done with anything or with. With all of the jobs just because I have too much scheduled that day. So that's usually the day that I go out and I'll spend two hours myself.

And so, for example, if we were to pull that day up, I'll give you the numbers on that one.

So real quick, just.

Your percentage, like, the 36%.

Of your revenue going towards labor, that's not super horrible. I've seen worse. It's not, like, incredibly low, but it's not like, that's not a huge red flag for me. What the bigger red flag for me is the fact that.

Your hourly rate for them combined is under. Is like $37. Under. $37 is under.

You think it should be higher?

It should be, yep. Because, like, if you're targeting 60 to $70 per hour when they're mowing, which I understand there's going to be a certain amount of inefficiency, let's assume that they're actually hitting budget hours on the job. That means that, you know, we're going from 60 to 70, their max capacity, max efficiency. And if you're going all the way back down to 36, it means about 45% of their day is waste.

Gotcha.

Right. So.

$37. Got it. Okay, cool. So this is. This is Wednesday, right?

Yep. So for these ones, it's just Matt and. And Nate.

And I don't know why they don't line up. So I'm gonna have to see if they're changing. Oh, no. I had to go back and change that. That's why.

No worries.

So total hours worked for these guys today would be 19.5.

And then the total for revenue is going to be 40 plus 36 plus 45.

Plus 40, plus 35 plus 35 plus 37 plus 185 plus 46.5 plus 37 plus 20.

Plus 35 plus 37 plus 39. And that's it. That's the total.

And did they actually finish on that day? Like, they finished all of these?

No. So that's. So the big one that they don't usually finish is this one. We've had an issue. Their sprinklers come on in the middle. In the morning, when my Guys are there. And so I usually end up doing these to Lacey and Alan.

So let's assume on this specific day, did they finish those ones or not?

I did.

Okay.

Got done, but I had to go do them.

Let's subtract those two out.

So minus 37 and then minus 185.

Got it. Okay. All right. And then they work 19.5 hours. We're staying at an average of $13.50. So 1350 times 19.5. Yeah, this is a tough one. All right, divided by the revenue here.

What was my revenue for that day?

445, but much lower. Yeah. So on this one, you're at, like, a little over 59% of revenue going to the employee or just to labor. Right. And so once you look at payroll costs, you're already over 65. And then once, you know, gas, fuel, like, all that stuff, you're losing on that day big time. You know, anything over 40, I get really, really afraid when it comes to labor versus revenue. Right. Because we're looking at gross revenue, too. So, like, if there's a spray that you're charging up, charging on, or dump fees or anything like that, we're counting everything right now. So, like, anything over above 40 is a massive red flag. Like, if you start calculating this every day, big red flags. If there is anything over 40, like, you can almost guarantee you're going to lose money on that day. Whereas, like, 36%. You do that every day, you're going to be okay. Like, you'd probably run a 10 to 14% margin business if you scaled that. Right. Like, it's not going to be like, I'm talking. If you scale it right, using those margins and using those numbers. So go ahead.

Can we do Thursdays? Thursdays, they usually are a heavy day, but they're able to finish them all.

Okay.

One that I kind of try and do everything off of.

And so, like, on that day, for example, their dollars that they're actually earning per hour on the clock is $22 per hour.

Okay, so this is now that was Wednesday. Now we're looking at Thursday.

So we've got for the revenue, 45 plus 40, plus that one doesn't get done. So 35 plus 30 plus 35 plus 35 plus 51, plus 37, plus 40 plus 39 plus 39, 39, 37, I believe on that one. And then 38.

All right, so total revenue is gonna be 540. And then what's the time clock for those guys that day?

That one's gonna be.

1775.

Okay, so 17 and three quarter hours, we're gonna assume 13 and a half dollars per hour for labor. All right? So we got 540 revenue, 13.5 on average per hour multiplied by 17.75. So our total.

Payroll that day just gross is 239.63. So we divide that by our revenue and we're at 44.4%. So again, it's over 40%. Right. And so honestly, this is just like a really easy number for you to get used to just calculating, just to know your numbers. Like, I don't care about all the ratios and even dollars per hour and all that, but like if I Simply take your revenue 540 divided by the number of hours that they're working in a day, you know, this day they're making $30 and 40 cent, 42 cents per hour that they're on the clock. Right. There's just no margin for error on that kind of a business. Right. You're just, you're not going to have any net profit. And so one of two things, One is you're not charging what you think you're charging in terms of hourly rate.

Right.

Because if they work 1775 and they're 80% efficient, like they're working 80% of the day. If we run those numbers, we go 17.75 multiplied by 80% is 14.2. Let's assume just $60 per hour that they're working, not the 70. They'd be making $852 in that day instead of 540. Wow. Okay, so one of two things is happening. One, they're ultra inefficient. And when I say that, I mean they're, they're about, they're spending 40 to 50% of their day doing nothing. Or two, on the job site when they're actually mowing, they're not making 60 to 70. Even though that you might be shooting for that in terms of budgeting your hours, they might just not be hitting it. And I don't want to accuse them of just being lazy. And.

If, if you might be looking at job like, oh, that's gonna take 40 minutes, but every single time they come, it's consistently taking over an hour. You're then, then they're there. They're set up for failure. Right? Like, they're not going to be able to hit 60 to 70. And I agree with that number. Like, that's why I knew something wasn't lining up. Because if you're doing 60 to $70 per hour for mowing. Like I said, your revenue should have been on that day like 800 something.

Right, right.

So generally you can assume about 20% at least inefficiency for mowing because you got drive time, you got unload, clippings, all the rest of it. And that's a good crew. Like a crew that has to drive far away doesn't have a tight route. They might be 30%, but you're like at 45 to 50% inefficiency throughout the day.

This route is all within one city. There's probably a 20 minute drive time from one end to the other.

Got it? Yeah. So it's got to be one of two things that is either, you know, the times are off, like how much you're, you're budgeting for the job and that means basically you need to raise your prices. Or two, you do just have a crews that are not sleeping on the clock, but like they're just dragging their feet because like 40, 50% of efficiency can go like that. That's 10 minutes in the truck before, 10 minutes after stopping a couple times at a gas station. And that's 40% of their day that's wasted. Right. And that's the numbers that I'm seeing now in terms of just looking at if like, so you've obviously done the jobs when you do them. Is that kind of when you're at 60 to $70 per hour, easily. Got it. So have you implemented any sort of P4P or like any sort of concept for the guys yet, the changes that.

You'Re making with yours? And I've thought about it, but this was what I really wanted to do was figure out where I stood. Because I don't know if a P for feet for P would be good just because these are our numbers or if it would be better. You know, I haven't done a whole lot of research into it yet and you seem, it seems that your crews are so good that it makes sense for you guys because they're already running at that 80% efficiency level.

So almost it's like the other way around. Honestly. Like, it's like the reason they're that efficient though is because of P4P.

Okay.

They weren't, they didn't used to be that efficient. Right. And I don't think in your scenario, Mark, like doing a full fledged P4P program is going to be the best thing to do now. Right. Like right now we need to figure out simplicity and like track one number and honestly that number for you is going to be revenue or, sorry, payroll, that you pay them a day divided by revenue. And I would just track that number like crazy. So if you take your. Let's do this. Revenue divided by how much you paid that crew in a day. Okay. And even if you just want to make the payroll number flat, like say $14, if you just want to make it flat. And then what I would do if I was you in this scenario, implement. Try implementing all P4P. That's going to be a, you know, a five, six month process.

If I was you, I would track this one metric every day. Revenue divided by payroll. And every time they're over the number three, give them some sort of a bonus. Because if they're, if they're at 3, that means that you're at A. You're under a 33% of your revenue is going to the payroll.

Okay.

You see what I'm saying?

Yeah. What kind of a bonus is it? Like a per job bonus? A per day bonus?

I would do as simple, like everything simple, simple, simple. Right. So I would literally do something like you get 20 bucks if you're on a crew that does above the number three. And I would track that every day. I'd say I'd have a scoreboard. So we do this. We have a scoreboard. Like I could pull mine up here right now actually see if I have it.

There's our own, like slack or something like that.

We just do it in Excel, but you could literally do on a piece of paper. Like, I don't, I don't really care how. Let's see here.

See if I can get a good example here. Yeah, this is, this is a bad day. So let me show you a bad day. Since bad days are always good to show. So. So this is an example of something I get every single day. And that number on the right hand side is exactly what I'm talking about.

Oh yeah, Okay, I gotcha.

Right. So that's a daily we call max metrics or like a score that we give every single person based upon revenue divided by how much they're being paid. And that's just a base rate. So we just use a round number, $18, and are trying to determine how much they make. Right. And this is a bad day. Right. And you got people like that are literally two and a half, three times more efficient. They just had a great route. The other people I know, they got, they had some sort of issue with their truck or something. So like stuff happens. Right. But the bottom line is I'm seeing this every day. I know. And then we have an average that we have at our team meetings, right, where we take all of those from the whole week and we put a number on the board. But the bottom line is, you know, we have a full out P4P system where that's what they're thinking about. And every single minute. The problem with doing what you're kind of thinking is as soon as they have a bad job or it's raining, they can kind of just decide like, okay, I'm not going to go for my 20 bucks extra today. Right. And that stinks. But like on the flip side, I would. I still think someone that works eight hours is going to go for that extra $3 per hour if they can get more efficient. That's basically what you're giving them, right? They get $20 on a seven or eight hour day. They're making like $253 more per hour if they're that efficient. And that's gonna very quickly determine if it's your budgeted hours on the job that's wrong or if it's their lack of efficiency and commitment to the, to their job. Right. Because if all of a sudden you implement this and the next day they're finishing jobs, you know, in six hours instead of eight hours, you know that that extra two hours was complete waste.

Right. And so I think something like that would be the first step because you're going to determine because if they start there, you know, if they're really trying to kick butt and yet they're still hitting like 2.4, 2.5, then you know, maybe it's a matter of you needing to go to those jobs and look at, okay, like really, am I going to be able to get this done in time? Is it, is it 60 to $70 per hour when I'm solo, like can a two man crew, is it they still hitting that number or is it going to be more like 40 to 50? Right, because that's probably what also is the issue too, right? You're solo, you're going to be like 70 bucks an hour. When you put two people together, there's an inert amount of inefficiency because there's two people waiting on each other. And so they might go to say $50 per hour. Well now if they're a little bit wasteful at all throughout the day in terms of not being efficient, you're down to where we're at right now. 30, 22, you know, 35. So like that's where I would Start in terms of the financial side and honestly, in terms of you and you being an owner, like, I wouldn't take it hard. Like, I honestly think it's a revenue and it's a money thing. Like, that will wear anybody down. Like, I remember being there and losing the sleep, and I remember taking a loan from my brother my first year because I knew I would not be able to do payroll the next week. Like, I remember all that stuff. That was horrible.

And so, like, I think the number side you need to have, like, right now you need to be able to, like, when you wake up in the morning, the first thing you're thinking is what yesterday's number was. Like, 3.1. We're at 2.6. Right. And then get your guys involved. Right? Like, every day you literally just need to do this. You know, Crew 1, have their. Have their number. Crew 2. And literally, you know, 3.2, 1.6, literally. Even if you draw on a piece of paper like this and are just showing them this the next day and be like, hey, Crew 1, congratulations. $20. I'm going to give you guys cash this afternoon when you get back from the shop. Like, that'll get some people moving, right? And you're gonna all of a sudden probably find the one employee that is completely slacking off because the guy who wants the 20 bucks will now tell on him instead of letting him sleep in the truck.

Right, right. And that's exactly what we need. Okay.

I honestly think this is the thing. The reason the numbers weren't lining up, Mark, is because.

Where all my papers go. Mercy.

Oh, there we go.

See here.

The reason the numbers weren't really adding up for me is because if you look at how much you're making divided by your employee count, it's very, very low. Right. Like, you should be able to pull in $110,000 almost by yourself every month in terms of being solo.

You're kidding me.

110,000 a year? Sorry, did I say a month? Yeah, no, you did, but.

No, I know what you meant. Like, but I mean, I just.110 a year myself is insane. Like, that's just. That's mind blowing.

You can do that. So, like, you should a solo solo person because you're so efficient and because you're going to be able to charge a higher rate due to the fact that you're an owner on site, can easily pull in 10 to 12 grand a month.

And not working 80 hours. Like, I'm talking 60, 60 to 70. Right. And so I do think like, if you were working in 2018 full time, like, cranking it out and made 35, there's a very good chance that it is a pricing issue, because it wasn't. Like, in that year, you made 70 grand and then you hired someone and you went to 80 grand. Right? Like, there was. There's definitely. You are the most efficient employee. And so if you only made $35,000 in one year, you know, your next employee, you're lucky if he's at 80% of your efficiency at like 25 or 30. Well, 25 or 30, immediately that's gone in salary. Like, gone. Especially if they're full time. So I really think, number one, you probably do have a pricing thing, a pricing issue, right? And that is just like, you might look at a job and say, it's gonna take 40 minutes, so I'm gonna times it by $60 per hour, therefore, I'm gonna charge $40. But if that mode takes an hour, now you're only charging $40 per hour, and that's when the blades are spinning, like on the job, you know. So I do think that's probably the issue. But I would actually start with trying to create efficiencies, because that's the immediate fix. The immediate fix is creating a hybrid P4P system where you're going to be able to make your guys more efficient. That's like the quick jolt in the arm that will, like, kind of save you in the next few months. Then what you need to do. Because what's going to happen if they become more efficient and they actually gravitate to the P4P? Like, at least this $20 bonus that you do on a daily basis, if they gravitate to it, which.

Maybe, maybe not, but, like, it's something. So maybe. But if they did, the next stage is you in a couple months looking at your pricing and seeing if you need to start raising prices.

All right, now, I really believe that if you had one helper, you could easily do 110k in revenue. Like, I mean, that should not be hard in terms of pricing. Like, very simply, like, so the Mount Vernon location, it has manager and one employee. So basically two people out in the field, and they're going to do 22,000 in revenue this month. Now we're in a different market. We're going to charge no, more like $80 per hour on mowing. But that being said, no, their. Their payrolls higher. Right. So it's just a matter of even if you take 30% of $22,000 off and said you made $15,000 per month. Like that's doable, Very doable for you and one other person. And so if you do P4P, what's going to happen if they actually start to gravitate to it? Even though it's a kind of a scaled down version, you're not going to need one of these people. You're not going to need either the part time, a part time or a full timer.

And you're going to become more efficient. And then what's going to happen is you might raise your prices, lose some customers, and cut another person, but now you're doing it a higher margin and you have less overhead because you have less people working for you. Okay, those are the two cuts I'd make. Right. Number one, efficiency. You're going to immediately get a jolt in the arm if they take to that. If they. Regardless of whether or not they do, the next step is increase the prices. If you lose 20% of your customers, 20% leave. But you're able to raise your price by 20% in terms of like going from 40 to 50, 45, like that $5 is all the money. Like that is where your profit is right now.

You know, spending less time out on the jobs and making the same.

And honestly, if you go back to you and one other person in the truck, that'd be fine because, number one, they're gonna be ultra efficient because now they're with you. But I genuinely believe that you could do at least 80 to 90 grand with you and one other person.

If you're priced correctly, you're efficient.

And that would be awesome for us because with that, I could get out of debt this year and work on getting better equipment that doesn't break down and new trucks and all that kind of stuff and then expand next year. Yep, we're in a much better spot. Okay. Now, have you. I know most people usually increase prices at the beginning of the season, and obviously this year is a huge anomaly. So if there's any time to increase it, you know, we can reference Covid and all of this other stuff to do it. Have you seen a whole lot of success with that? Would. I mean, what would, what would you recommend in that whole thing?

Yeah, it's gonna depend your local market if people are pretty price sensitive or not.

In terms of the COVID thing. Right. I don't mean price sensitive in general, because everyone, including me, thinks my customers are price sensitive. Everyone thinks that their customers are price sensitive. I mean, in terms of COVID like if it really Hit your area. If it's like taking out manufacturing, which is a big part or something like that. I, we didn't raise prices this spring, we were doing it next year. Right. But in general you want to raise prices when demands very high. So that way if they want to go get other bids, they're waiting one, two, three weeks to get hear back from people. And those people, the other contractors are so booked, they don't even, they're not even advertising. Right. And so I would, you know, the two places to increase prices is middle of spring rush or during a fall rush, like, you know, if it starts growing pretty heavily in September, that's another time to do it. And a lot of times because they're like, oh, it's only another month or two of mowing, let's just go for it. And they get used to the new price and then next spring you just continue. Right. So those are the two times. So I really think you've got a couple months here to really number one test the idea of P4P with your guys. Just literally just start. I wouldn't even float it by them. I'd just be like tomorrow, like hey guys, we're going to do this new thing where I'm going to show you the cruise and the revenue divided by the payroll and that payroll number we're just going to use $14. And whoever gets over 3.0 each day is going to an extra, extra $20 cash the next morning. And I would take dollar like $20 bills and give those to the employees the next morning. Let them see cash flowing and being given out, you know, and so that's going to be step one. Step two is like you still got few months, like you can go and actually start analyzing which properties are underperforming. And one thing about Yardbook, I don't know enough to be able to know if it has this functionality where it can do time tracking and you can start being able to see like okay, am I ahead of budget hours or am I behind? And what's the variance of either either or. Cause if I'm way behind, it's going to be make it very clear to you in three or four months who needs to, whose prices needs to be increased. Because I'd rather you not just do a blanket shift in price because like you were mentioning as you were talking about it, there's some you make some money on, there's some you already know you're kind of don't make much on. And so I'd rather, you know, your Variance on budgeted hours and really know which ones are under bid.

Okay. And then work on those for the pricing in the fall.

Yep.

And Yard book does have that functionality. So I'm gonna go back and see if maybe I should be able to automate everything that you just did every single day. So tracking how many hours my guys did versus how much we build successfully, so that shouldn't be hard.

Yeah. And there's certain functions that a little harder, like the full P for P system takes into account nice things like callbacks and damage cases. Like, it integrates all of that. But this is a really good place to start, you know, and sometimes this doesn't work. Like, I'll be honest, you know, one out of five times your guys, like, I'd rather sit in my truck all day than for $20 extra. On the flip side, like, they can go from 13, $14 an hour to 16, $17 an hour if they hustle. Right. Because their hours that they work in a day is also going to get compressed and which will elevate the dollars per hour that they're making. So it's a win win for them. It's a win win for you. And if you can consistently stay around 30, 30 to 35% revenue, or, sorry, 30, 30 to 35% of generated revenue going to employee expense, you'll turn your business around. Just that one thing.

And that's what we really need. Yeah, that's. I mean, having that one. What was it, a sick or a 50% margin or whatever. That's insane. 59% or whatever.

9% of the. Was going to labor, right? Yeah. So traditionally, like, I can tell you right off the bat that you lost.

Probably lost about $140 on that mower out that day. Right. And that's assuming nothing got broken. No callbacks, that no customers called you, and you're not charging for your time on those. You know, you had to get these guys started in the morning. Right. So there's just a lot of, you know, admin and all this stuff we don't even think about when it goes into 59% labor because your time isn't calculated into that. Right. And so.

You can't. You can't mow and lose money. And that's why you got to think about when you do raise prices. If you do that, like, you can't keep doing. It's not sustainable. You're going to run yourself and your crew. It's not good for them if you know that you're going to be out of business in a year. It's very bad for your crew if you keep going down this path. Right. And so I just. Number one, try p for that $20 track every day revenue divided by 14. And if you're coming above 3.0, you get 20 bucks. That's step one. Step two, let's really begin to track your time on those jobs and see which ones are lagging. And we should just take the bottom 50% and increase their price.

And that might be next spring, right? This fall? It could be even next spring. But that's definitely something that you're going to have to do because you're not generating enough revenue for the amount of employees you got. The number of employees you got.

You should be doing 30 to 40,000amonth. And not.

That's the other thing is not all of them are lawn care. Not all of them are, you know, full routes or anything like that. But I mean, if I have them, I might as well be making money off of them. Right? So.

Yep. And the thing too, is, like, even if they're on a small project or something like that, you can still run this ratio.

Right? Right. Per job.

Just make sure you're taking the labor revenue divided by the payroll, not the total job cost. Because in the total job cost, you got materials and everything else. So you can still run this for a landscape crew. All right.

Okay. That works.

I know you, Rosie, just talked about the number side, but I really think that's going to be this. The unlock for you personally, too.

Well, and that's what. Yeah. Honestly, I came into this not knowing what was going to help me. So, I mean, if this works and it helps, you know, then I' take it and run with it, and then we'll all meet back with you in a couple of months and see where we can go from there.

But that's.

That's what I needed.

So. And don't be discouraged if that the P4P hybrid thing doesn't work. Like I said, I've seen it not work sometimes because guys are like, hey, it's a hot day. I'd rather just let my $20 go and sit in AC. Right. So that's a tough. That's a tough part about having the hybrid thing with P4P, because it doesn't kind of. It doesn't unlimit them. Like, it still has a ceiling. Right. However, you probably know your guys, which ones would take to it. And guess what, if two of them take it and the other one's like, man, this is dumb. You could literally fire all the ones who don't think it's cool and get the two and they'll perform fast enough to get all the work done. Right, Right.

And you mentioned in one of your videos, it's been a couple of months, I think, but you mentioned if you could have gone back and done something different, you would have just focused. Focused on the lawn care. Do you think I should consider redoing my website and all that kind of stuff and just tailoring everything to the lawn care side of it, you know, getting rid of the landscaping crew, all that kind of stuff. Would that be.

I'm just here, I'm just looking here at your page. Services landscaping. The thing is, you don't do much with landscaping. Right. Like, it's mostly small stuff. Mulch, bed cleanup.

It's mostly a couple of yard installs this year. But I farm out the irrigation installs and the grading and then we do the sod ourselves. So even those aren't that crazy.

Yeah. And honestly, I would stay away from like, like subcontracting altogether. Like if it's irrigation, for example, like, hey, Mr. Jones, you get everything, base prep, then we'll come to the sod. And there's a good chance they're going to lose that job. But your time in admin of subcontractors on a small. Some of these small landscaping jobs I'm seeing, you're just not going to be able, like money once you factor in your time.

Right, right. And that's. Who spends most of their time on it, is me, because I'm the one that's able to actually go out and do it.

Yeah, but I wouldn't abandon some of the things you're offering, like weeding services, bed cleanup, you know, those things are just labor. And that's like great markup and that's great upsells for your existing mowing customers. So I wouldn't forego those yet. I just would stay away from anything that is project based above. Like a two, three day project. Like, you don't want to touch that right now. You know, it's just not going to be efficient and you don't have time to go manage those jobs.

Okay. All right, that makes sense.

So maybe, Mark, maybe in like before fall, let's try to get on another call and let's see how number one, the P4P kind of thing went. How that went, I. If it takes, I genuinely believe you'll let two of your people go. The ones you don't really take to it, you'll Take the two people who really like it, and they'll get all the work done. It's incredible how all of a sudden they'll go from 59% to 30% because they'll be trying. And the thing is, if you're transparent about the numbers, they know what that they start figuring out in their head, like, okay, I need to get these jobs done in order to make the 20 bucks. Like, they're not idiots, right? If you share the numbers and they know the pricing and they know what the structure is, you know, I think it'd be, you know, they won't be sapping the clock either, because they know, hey, if I can just clock out before, say, 4:30 and I get all these jobs done, divide that, okay, I'm gonna hit that extra 20 bucks. So if you just get two, even one of those people, you will be able to get all the work done like I'm telling you. And if one person takes to it, I would that I would go right for the price increase on the bottom 50%. Maybe you lose 20, 30% of your clients. You'd be far more efficient and far more profitable with one employee. I genuinely believe you could do 70 to 80 grand revenue easily.

Awesome. All right, I'll get focusing on that and maybe, I don't know, we'll see where that goes. So, yeah, I'll get back on your calendar invite thing and set up something else in the next probably two or three months, and then we'll go from there. But yeah, I'll keep you updated on how it goes over this next week, and I'll implement it tomorrow and see what happens.

Good stuff, Mark. You have a great evening. Take care.

I appreciate it. Have a good one.

Take care. Bye.