I LOST MONEY for years: here's why

One of the best ways to make you actually get paid is to have where you have automatic payments coming from your CRM as well as making sure you accept credit cards on file. Now when you're going to accept a payment method of credit cards, you are going to pay 3 to 4% of processing fees to the payment processor. Something like Stripe is going to have to do the transaction of pulling the money from the customer. But then what's really cool is within a day or two, you are going to get your money. Ultimately, we are willing to forego the 3 or 4% extra in fees in order to be able to get the money faster. So yes, there are going to be the 3 to 4% of payment fees. All right. This is why most people say, well, I'm never going to do except credit cards, cash only, checks only, but I am not going to pay the 3,4%. The bottom line is, I'll ask you this, when was the last time you, you did business with a really reputable company that was really high quality, that it was like, no, you must send us a check. The only people I can think of is like the utility company and no one likes them. But like restaurants, gas stations, grocery stores, all the rest of it, you just assume that you can pay with a credit card. And so this 3 to 4% is simply going to get marked up into your costs and you're going to charge this to the customer. But I can guarantee you this, that the customer is willing to pay 3 to 4% more in order to be able to use a credit card. Because this type of customer that wants credit card and is willing to pay this is also much more time sensitive, which means they value their time a lot more than someone else. And they're gonna be looking for and expecting things like having a credit card on file that has automatic payment. Now inside of Copilot, you can actually make it with just a click of a button right here. You can just click this button and immediately require all credit cards on file before a customer can even accept an estimate. So that way when an estimate gets accepted, you already know just by the fact that you got a notification saying an estimate is accepted, they've already had to put a credit card on file. And they can do that really simply using the client portal. They click add a credit card and boom, just like that, they're able to quickly add a credit card and it's able to be charged automatically for from inside the software. Whether you're doing daily, weekly or monthly payments, you can charge the card anytime. As long as on the account you can also add ach, which is like basically a bank transfer also from their account. Now, on bank transfers, we're not going to be at 3 to 4% inside of copilot, we only charge.5% and that caps out at $5. So if you have a $20,000 down payment on a massive project and you don't want to pay 3 to 4%, just require that they put a bank account on file or ACH on file. And they're going to put their bank details in. They're going to have to confirm their bank account. But once they do that, now you're only going to top out at $5 per transaction. So on $20,000 payment, $5 transaction fee. So you can definitely save money by having an ACH instead of credit cards. But ACHs are a lot more difficult to get on file and for the customer to actually validate inside of any software, including Copilot, because they have to actually get a couple deposits. They just put their bank information in and it takes a few more steps. And so I just need a payment method on file. And if I'm gonna give up 3 to 4% to credit card fees, I don't really care. Now, if the customer calls in to accept the estimate, you can also put a credit card on file directly from the customer's account. I'm simply going to go to.

I'm simply going to go to add a credit card and exactly the same thing. Add a payment method for this customer to be charged every single time. I can then automatically charge them without ever asking them again for any sort of payment. They literally never have to even see the invoice. I'm going to send them a receipt for end of the month. Or when I send them a big bill and I charge their card or I charge their bank account. But I don't have to always be asking for money. I have a payment method on file, I charge it, and we're locked and loaded. The type of customer that likes that is your premium customer. The person that wants to put cash underneath the mat, the person that wants to pay check only, and they take 30 to 40 days to just pay you. That's also going to be your lowest value customer. They're going to be price shopping you and they're going to jump along to the next vendor that's going to offer them a lower price. Now, when it comes to big projects that get accepted, you want to make sure you get a deposit before the job starts. In other words, I want to actually collect at least 50% the value of that project before I even go out and buy materials or get employees to go do the work. Here's why. Because when I do the actual work itself, this is the actual work. Doing the job, that's fine, but I don't want to wait until afterwards to actually get paid. Here's why. Because in order for the work to get done, what has to happen, I have to have employees and I have to pay them money. Also, before the job even starts, I have to get materials. And that's going to come in the form of, let's just call it a landscaping job. Some mulch, soil, gravel, trees, whatever it might be. Also have to spend more money. This is why someone that's growing really fast can run out of cash, is because ultimately I can be paying for materials, buying all the trees and the materials for the job. I can then have to hire my employees and pay them on a weekly or bi weekly basis. Let's just say this is a three month job, all right? If I am waiting to the very end of the project to actually get paid, assuming they pay like maybe 30 days later, now all of a sudden I have been spending money to materials and to my employees and then waiting for the payment before I actually get paid on the job. This is why you need working capital. But I can solve a lot of these problems by collecting 50% of my money up front. So that way this 50% deposit or down payment is able to cover the cost of my cogs, cost of goods, sold, materials, direct labor. All of this stands for cost of good sold. If I can cover up 50%, usually that's going to cover my direct labor and the cost of materials before the job even starts. That way I don't have to have negative cash flow throughout the entire project. I'm able to get that money up front. And then when I actually end up collecting on the project, the last 50% that goes into my pocket to cover the cost of overhead and I actually make some profit. So in order to get a deposit or need a down payment, I need to have certain rules in terms of when I collect a deposit. Now, back in the day when I was growing really fast, I wanted to make sure I didn't have to add more friction to the sales process by asking for a deposit. And the reason for that is because, like, look, if someone wants me to do a $10,000 job, I want to get on it right away. I want Alex put on the schedule next week, send them the invoice for $5,000, and I hope they pay me beforehand, but I just want the job on the schedule. What's really cool inside of Copilot is you're actually able to collect the deposit using a deposit threshold, which means if the project, the estimate getting accepted exceeds a certain amount of amount of dollars over a certain size, the customer will have to pay the deposit before they even click accept on the estimate. So that way it ensures that I'm always collecting my deposit. There's no chance ever that I'm going to go out, buy materials, hire my employees, and then they don't pay me and I am out. Like, literally, I've seen big projects that take a couple months wipe out companies because they don't collect a big enough deposit, or they were lax on their deposit threshold and they only collected a little bit of money or they had a deposit search like, yes, only $10,000 more jobs. Well, then an $8,000 job comes along, they don't collect any deposit, and now they're stuck out $8,000 and the customer's not paying. So inside of Copilot, inside your settings, you can just go to your estimate settings and make sure you have a deposit threshold. For example, I'm doing anything over $1,200, I want the customer to pay 50% before they even accept the job. Before they even accept the estimate, they'd have to pay this. That way, when I get an estimate being accepted and I get notified, I know two things. I know credit cards on file. So forever and ever on their account, I can charge for any sort of invoices that they owe me. I will never, ever have an overdue invoice. Secondly, I know now I have a deposit threshold that if they do have a project over that dollar amount that I have set, they're already paid before I'm even notified. Which means as soon as I get that notification, I can just put the job on the schedule. I don't have to send them an email or text message or call them. Okay, great. Let's get that 50% deposit. If you do that, you could be waiting another week to get the check. You could be waiting another week to actually play phone tag with them and finally get their credit card information. Just make it to where when they accept the job, they have to have already paid the deposit. And as we've already talked about, already have a credit card on file now inside your settings. You can make this a dollar amount too. I. I've seen some people, they just make it where it's like look, if you accept any estimate, we just want 100 bucks. Cool. Like, if you're in growth mode and you don't want to ask for the 50% down, sure. Make this easier. You could literally just do exact amount. I want $50, and that's it. So you can make a dollar amount or a percentage, but ultimately, making sure you have a deposit threshold is important. I recommend if you're hurting for cash and you don't have a lot of working capital, you need to make sure your deposit threshold is lower. In other words, instead of doing a deposit threshold at $3,000 like I used to. Like we used to do 50% down on anything above $3,000. The problem is, if someone did a $2,500 job, those were always the ones I never collected on and never got paid for because I never got any money up front. And so they held me hostage to that final invoice. Whereas now, because of the feature in copilot where I can. Before I even accept the estimate, I can require the deposit to be paid. I bring that way down $1,200. Anything above that, I want 50% down before the job is even accepted. And if you're like, well, some of my customers, I want to have a deposit threshold. Other customers, I don't want to have a deposit threshold. Some customers I want to have auto pay and a credit card required. Other ones, like my commercial clients, I don't want to. Great. Inside a copilot on an individual customer's account. I can actually go in here and have individually for each customer whether or not a credit card is required. I can also have custom rules and. And change the rules I made for the deposit threshold. So maybe there's a vendor you've always used. You know, they pay well, and you don't want to have to add that friction to the deposit. Fine. You can go right in here and change it to whatever you want. All right, that's all I got for today. If you want to learn how to make more money and get more customers, click this video here. It'll be great, and we'll see you in the next one.