I LOST $70,000 IN THE OFFSEASON! [Mike Andes]

Hey everyone, it's Mike from Copilot CRM and Augusta Lawn Care. Today I'm talking about off seasons. In my opinion, one of the biggest reasons that home service businesses fail is because of mismanagement of the off season. And better yet, they don't take advantage of the off season. I really believe the thing that is our kryptonite and our weakest link and our Achilles heel is in the home service and home improvement industry can actually be turned into your biggest advantage. And so if you can take advantage of the off season instead of looking at it as the weakest part, the part of the year where you save up all your, your profit and have to waste it on inefficient labor and just getting by on paying your overhead expenses. This is the video for you. So the thing that I had to learn, cause I would spend, I would save up like 70 to $100,000 of my profits by the end of the season. Ended like October, November, and I would burn it off throughout the winter. Why? Because I kept all of my crew on full time work. And I believe that I had to keep my entire crew busy all off season. For us, that was December, January and February, those three months. And I would keep my entire crew busy because I thought if I didn't, they would all leave and never come back. And I needed them for spring rush, I would just keep paying them. We would like deliver cookies to property managers. We would do free pressure washing services for our mowing customers. We would do unsolicited free estimates for commercial properties and just like walk up to them and give them free estimates, which is all fine and good. And there was definitely a small return, but it definitely wasn't anything close to what I was paying out in payroll. And so I would burn through 70 to $100,000 of all the profits I'd made throughout the year just trying to keep my crew busy. And I learned very unfortunately after five years that I could be way more profitable if I just offered my team more money and then laid them off throughout the winter. And so come to the end of November, I might keep a couple of my crew busy, but the rest of them, I would lay them off and tell them, hey, February 15th, a couple of weeks before spring rush, you're have, you have a guaranteed full time position to come back and you could even if you wanted to, you could even have a bonus when they come back. Like hey, 500 bucks once you come back and you work from the 15th to the 1st of March and we're in Ghost time for spring rush. We will go ahead and give you $500 cash or we'll add a benefit or we will do something for you. You could do that. And this is what boggled my mind because I thought all the time I had to give everyone full time year round work. And I realized very quickly that what I should do is match the demand curve, the demand of my services with the supply of labor. In other words, when I had a ton of work coming in, I should try to have as much demand, as much supply of labor as possible. We which means during the off season, if I don't have a lot of demand for my services, I should try to get rid of the supply of labor. Otherwise I have bloated costs, massive overhead structure, and I'm paying for inefficient labor like people doing free pressure washing and giving away cookies to people. That's what I did. It sounds stupid now, but once I changed that to where like 70, 80% of my crew, I would lay them off for three months, guess what? All of them came back. Why? Because now I could afford to pay more just during the season, the other nine months of the year, and they couldn't get a better paying job for the off season. And furthermore, I was able to get out of all these wacky winter services I was, I was offering that made my premium, my insurance premiums go up that weren't really efficient or profitable. And we had to have a whole bunch more equipment for specifically for us it was snowplowing because it like literally snowed once or twice a year. But we got all this equipment, insurance and all the rest of it just to facilitate keeping guys busy when there was snow on the ground. So instead I offered them more money. I said, Look, 80% of the crew is going to be laid off for these three months, but you're guaranteed a position to come back. And most, almost everyone came back. It just boggled my brain. And it was easy for them to get a job elsewhere and they actually preferred it because they didn't want to be working out in the cold Pacific Northwest. Rain and sleet and hail and even a snow, snow. Like they didn't want to be outside. And it was really easy for them to be able to get an indoor job delivery job, a warehouse production job during the retail months. Like the go time for holiday season is December, January. Like it was an easy transition for them all to get a temporary position and then come right back during the spring rush and be able to make more with us in terms of profit. Sharing in terms of pay for performance. We started to add benefits literally a year or two after we started doing this, where we lay people off because we had the money to do it now. And I would keep their medical benefits during the winter, even if they were laid off as a benefit to come back. So that was the first thing that I did and I had to rewire my brain. The second thing is the second reason why so many home improvement businesses fail because of off seasons. And they, the off season just sinks. Their business really is, we don't have enough offers. We don't have enough offers to offer our customers. We only offer one service during spring rush, one service during our go time. You might just have to think about your business as creating season specific offers, season specific services. So we have a, you know, spring rush for mowing, and then we have Christmas lights during November, December and January. Boom. Now you have two specific offers, two season specific services. Instead of having an off season and a on season, I guess you'd call it. So the goal is, how can I add more services to be able to create more offers for my customers? So I don't even have an off season. That leads me to number three. Off seasons keep you poor. You want to be really blunt? Off seasons keep you poor. And so how do we, yes, we can mitigate by having inefficient labor and laying people off. But what if we actually went on the offensive? What if we actually created offers and services that could complement our current on season, our current rush, and instead of having an off season, you just switched the offer, you switched the service. So for Augusta Lawn Care, our owners, I said, look, what if Augusta Lawn Care services during your off season for three or four months? What if your business was actually called Augusta Winter Services and we have winter services where you go trim bushes, we do a lot of property maintenance that isn't mowing. And we check their gutters. We turn the bushes off the house, edge the walk, edge the, the drive, the, the walkways and the lawn. We blow off the driveway and the walkways. We pick up branches from windstorms. We salt any of the steps if it's icy. Like, we do a bunch of stuff. What if that was your main thing? What if the name of the business was Augusta Winter Services? That would actually be your time to like go all in. You, not the time like, oh, we're settling into our off season. We're going to slow down, we're going to lay people off. You'd actually be like, let's go all in. On this, if that was your primary service, it would actually be your time to go on the offensive, to be hiring more people marketing for your services. And how, how can you change your mindset to, instead of thinking about having an off season, you simply change it to having season specific services that you switch and alternate from based upon the weather and based upon the seasonality of those services. Makes a lot of sense. If you're in mowing to have something like Christmas lights or snow services, depending on your market, you're like, well I, I only do construction. Well, you're like, when it rains, no one wants, can you do something indoors that isn't painting outside? Can you paint inside the house? Can you do some sort of cabinetry or resurfacing of cabinetry or cabinets or interior something that might be better during the winter? And then you only schedule services and you only focus on advertising services for that specific offer during that window of the year. So if you manage the off season correctly, there's three things you can do. Number one, you'll be able to continue keeping your crew busy with profitable work when no one else can. This is how you dominate your competition, by the way, when, when no one else can, you keep your crew busy. What does that allow you to do? Go and hire all the people they laid off. Hire all the people that are twilling their thumbs at home because they don't have a season specific service, they don't have multiple offers. So you can go pick their employees off and you can literally get the best of the best. Number two, you can continue to get more customers when no one else can. How do you do that? You create these season specific offers, you create these multiple on seasons. Now that you switch what you're focused on the business to allow you to be able to market and advertise when none of your competition is. If you do the opposite of all your competition, you're gonna be, you're gonna crush it. If you look at any great business, they typically look at what the current is in the industry, they do the opposite thing. And so if everyone in your market and everyone, all your competition closes for three or four months, lays everyone off, isn't marketing, isn't advertising, isn't hiring, that's the time to do it. Number three, I can continue to invest into my business when no one else can. During the quote unquote off season, your competition isn't buying trucks, isn't hiring, isn't expanding, and guess what, A lot of times trucks and equipment is a lot cheaper during the off season because people don't need to be using them. And so instead of buying everything during the spring rush and during the heyday when everyone needs trucks, everyone needs to be hiring, everyone needs to be advertising, everyone needs to, you can now invest money. And instead of me having to spend 70 to $100,000 and save it up at the end of the year to get through the off season, I could have spent that money on actually growing my business, buying more trucks, doing more advertising, hiring more people, investing in a nicer shop space. I'd be able to have done that if I didn't have to hold my breath through the off season. I would have been on the offensive and I would have been able to take that capital and invest it into my business and growing much faster. If you do those three things, you'll be able to invest back in the business at a time when none of your competition is no one else is hiring, no one else is advertising, and no one else is investing in their business during the off season. Create season specific offers because remember, off seasons will keep you poor in home service industries. Thanks so much. Hope that was helpful.