I messed up BAD

Hey everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have almost 100 locations around North America. And today I'm actually going to tell you what I think I messed up on in starting Augusta Lawn Care and franchising it. About two and a half years ago, someone commented last week asking what would you do differently if you were to restart the franchise process again and redo what you've done over the past few years? And so that was a good question. And I want to address that and be open and honest about what I think I failed at and what I did really well at. I think that part, the, the, the what I did well at part is going to be the long term future of what the results are. And I think I'll let those speak for themselves. But what I could have done better and wish I would have, what I wish I would have known is something I want to talk about today. First and foremost, if I could do it all over again, I would realize that I probably made the mistake of overselling the destination. And what I mean by that is I so focused on the destination of building a million dollar business and running it on systems and not having to be there and having a business that can basically run without you. Without clicking clearly defining, and this is a few years ago, I've been better about this recently. But about clearly defining the journey to get there is extremely, extremely difficult. I think now I try to make it as clear as possible it's going to take three to five years of very long hours, not taking much money out of the business, constantly reinvesting back into the company, feeling like you're beat up, trying to find employees and a management team. And it's going to be capitally intensive because you're growing and scaling very quickly over the course of three or five years. You're going to need 10 trucks or so to get past a million like that is all very difficult. And so I think when I first started the franchise it was like, look, I know it, in 10 years someone's location is going to look like. That's franchise agreements, 10 years the term. And so I'm like, I know what it's going to look like in 10 years. And that's what I talked about. But what I probably didn't convey as well as I should have a couple of years ago was just how hard it is to get to that location because at the time I was sharing the profit and loss statement from my very first Augusta Lawn Care location that was really profitable. And like Literally I show up there, I'm there maybe 30 minutes a week, like maybe 30, 40 minutes a week. And last year, for example, 2021, I took over $300,000 in distributions from the company and that's after my salary from the business. And I literally showed up there less than an hour a week. And so people saw that and like, oh, that's great, I'll join Augusta. And like that's what I'll have. And what they failed to realize is that it takes like that, that specific last year, 2021 was the eighth or ninth year of that location being in existence. So it takes a long time. And unfortunately, because I didn't clearly clear be as clear as I should have with the journey of getting there, it causes people to be disillusioned after one, two or three years when it's like, well, I don't have a million dollar business yet and it's not pumping out a bunch of profit and I'm still constantly pumping back into the business and trying to reinvest and grow and, and so I think that I could have done a better job of that because the destination is great. Building a business that's based upon systems, has high profit margins, has management in place that you don't have to be there every single day. There's, that is absolutely the goal. That is the destination that Augusta Lawn Care lives by. But it takes five plus years to do that. You can grow up the size that you need by three years, but to have a management team in place, have systems all aligned, have scaled back all of the complex services and just focusing on the simplicity of what we talk about at Augusta Lawn Care, that part can take five plus years. And so I think at the very beginning I oversold the destination because I was so confident in getting people there that I forgot about telling them how, how hard it was going to be to get there. You know, 60, 70 hour work weeks and the financial, physical, mental stress of dealing with employees walking up the job and customers screaming in your face and you working all day long and then having to go home and do estimates, like there's a lot of hard work that goes into the journey of getting to that destination. The second thing that I think I kind of messed up on was I was the original person of contact for the first 40 to 50 locations in terms of telling them about Augusta Long here I did zoom calls and it wasn't, I wouldn't call it sales, but it was like answering their questions and making sure it was a good fit for us. A Good fit for them. I'd say, like 1 in 7 or 1 in 8 people that I'd actually contact at the beginning would actually become franchisees down the road. And so I was doing all of that process because we were young, we didn't have much money, and like, there wasn't enough calls to really make it like a full time job outside of me doing it. I kind of regret that a lot because in doing so, I built up a lot of trust with me personally instead of the brand and the systems that actually is the business of Augusta Lawn Care. And I think that those first 40 or 50 people, not all of them, but some of them, had so much trust in myself that as I started to really focus on the higher end parts of the business and had less communication directly one on one with them, that they failed to realize that it's not knowing Mike or talking to me that's gonna help them. It's gonna be the systems and procedures of the business that they need to just simply walk through the steps that have been put out before them. And so I really wish that I would not have been that bottleneck at the beginning. Obviously, I had confidence we were gonna grow, but if I would have just had more confidence, I guess I would have hired someone from the beginning to take the sales part of the and the onboarding part of the franchise because it created dependency on me personally instead of the brand and the systems that I'm so confident in. And that the brand and the systems that we talk about is what will build a business. Not knowing Mike, not, you know, being a good fan of Mike. And ultimately all of our franchisees from Augusta Lawn Care came from this channel. They came from people watching these videos. And they started off as fans. And having a fan relationship is very different than having a business partner relationship. And so that's something that makes this kind of business a little bit difficult because typically if you were interested in a franchise, you would first be attracted the brand or the system or the business model prior to the individual. But this case with Augusta Lawn Care, every single franchisee has come from the content created. And their first, they've listened to me for years or they've watched the videos. It's helped them, whatever might be. And then secondarily, they're attracted the business model. And so I'm looking forward to the day when people don't even know who I am, don't even have an idea about Mike Andes, and they see Augusta long, like that works. And that's truly what I believe is the case. But because it was originally started so much, I was the cornerstone of it all. It sometimes distracts owners from the fact that the systems and the business model is the success. Not knowing Mike, not like it doesn't have anything to do with me. The business and the systems will work just fine with or without me and they'll actually probably do better without me. Constantly changing things. Um, the third thing again, we're just talking about things that I messed up on, things I wish I would have done better when starting the franchise. And obviously now it does. You know, it's 100 plus locations here pretty soon and probably that will do over $20 million in system wide revenue in 2022, which is great. But one of the things is I also underestimated how much capital it was going to take to get the franchise to profitability. Massive mistake on my end. We only this year will be consistently profitable month to month basis. Last year we were basically broke even. However, there were months where we six figures plus and when I say loss I mean like negative, not just like total expenses, like negative six figures in months. And so that is continued the trend this spring when we had to really massively hire a lot at command center. We had to make sure we increased wages and benefits in order to compensate for the, the issues with the labor market. And so it takes a lot of money to get a franchise off the ground. And everyone always thinks like, oh, you just like throw up a franchise website and like sell franchises and like people are just going to give you royalties. It's not like that. It's very difficult from a legal standp point. From an accounting standpoint, you spend a lot of money making sure you're registered and licensed in every state. You're insured correctly. We're insured against all sorts of craziness because I don't want an issue with the legal side of the franchisor to affect any of the franchisees. So we are legaled out to the teeth with trademarks and legal and attorneys and everything. It's very, very expensive. And then you have to register in every single state that you have a franchisee. So it's almost like opening up a new business in every single state as you, you sell franchises. So it's extremely expensive. Also underestimated the amount of support that is required and the capital that is required to give the support for these franchisees to be successful. And whether that be coaching, whether that be the IT support, whether that be website development that we do for them, whether it be software development, whether it be just the infrastructure of Command center where we answer all our calls and do the admin work. It's a huge, huge expense, I would say like when, when there was a private equity coming after Augusta Lawn Care late last year. And so when they look at Augusta Lawn Care that the biggest weakness they would see is Command center because they're like that is going to prevent you from scaling because it's completely dependent on more people. And if you scale by 10x number of locations, you're also going to have to 10x how many people that you hire at Command center because there's more calls, there's more emails and it's not like there's economies of scale because they're just more calls. You need more people. And so most franchises don't do that. They don't get involved in the admin side of the business because they, they want to have a model where it's like, hey, here's the business model and they can sell a thousand, a thousand of them tomorrow. It doesn't really affect their operations. Whereas Command center we are running a very, very low, low margin business which is, you know, answering phones and the back end admin work at a 30 to 40% discount compared to, you know, Jill's office or call Boss or Ruby or these other services. So it's very, very low margin. And to get people trained up to be efficient takes weeks if not months for them to really be efficient and profitable at command center. And before we even allow them to be on the phone, it takes weeks of training. And so it can take a very long time to make someone at command center actually profitable and efficient. And so when you're trying to make someone that takes a long time to be efficient, a long time to be profitable for the business before they even become useful. Like they can actually do things in the business to a high enough quality. When you take that and then you match it with the fact that you're scaling and you got to get a lot of those people. The amount of capital is crazy. And so I began to realize why people had told me and warned me about trying to get involved in the admin side to with the franchisees. Now the reason I've stayed committed to it, and I will always stay committed to it is because I also know that the admin side is what keeps most businesses from growth but keeps most landscaping and lawn care and home improvement businesses small is the fact that they are always tied to either a no office person and they are the bottom like for everything in the business or Two, they do have an office person, but they are so bound up by the fact that that office person leaves, their business would get slashed in half. And that is the case for most small businesses. All the office information, the client information, the data, how to use the CRM, how to answer the phones, where the keys are at for the office, all of that stuff is locked up in the mind of one person. And if they ever left, the business would literally go to shambles. And so with Command center, it's great that we have like 40, 50 people doing it and it's, they all know how to do the job. And so there's that time where it's like it completely goes to nothing. But getting all 40 or 50 of those people to have the information and the expertise and a level of experience required to do the job efficiently, profitably and effectively is very challenging and extremely expensive because it takes so long to train them. But ultimately, I'd rather us take the burden of training office people then having our franchisees have to always be worried about who's in the office and are they trained up, do they know how to answer the phone and all the rest of it. And if an owner has a spouse that they can really trust, that's usually a good move from the office perspective. But again, what's going to happen when you start a second, third, fourth, sixth, fifth location? They're going to have to build out their own office and it's extremely expensive and it's extremely hard to train people over and over and over and over again. And especially when there's high churn in an office entry level position. The same way that out in the field there's high turn, there's very lot, there's a lot of churn in call center admin, office receptionist type work because now you're competing with every other company that's hiring online and hiring work from home. That's the exact same job. And so that's extremely difficult. Been very expensive. All right. Last thing that I realized over the past few years that I probably made mistakes in is realizing that there's still two things I can never do for an owner. And even though I can have systems in place and give them the marketing material and have a website built for them and have the P4P software and have coaching and everything that we do for our franchisees, the thing that I can't do for them. There's really two things that most of it boils down to. First thing is sales. I can't, I can't make them be good at sales and secondarily is I can't teach someone necessarily how to be a good leader and hire and train and be a good boss and be empathetic, but also have standards and be able to attract good talent and then retain good talent and motivate their team, all of that stuff. These are the soft skills that is very difficult and, and most of the time where I see the failure in our current franchisees is in these areas that I can't really help them. Like I can't train someone, how to have a better personality and when they're talking to someone trying to sell a job or selling a contract and what to say in that next moment, like, you can train somebody, but there's certain level of like, I can't do it for you, right? I, I can, I can build a great website for our franchisees and I, I control that and I know can, I can do the data and run it and make sure it has great SEO and it's fast and mobile, responsive. I have full control of that and that's great. But what I can't do is like how to talk to a, and shake their hand and look them in the eye and be able to, when they have come with an objection, be able to counter it and be able to get past and get to the sale. That's very difficult. And you can do certain amount of training, but there's certain amount of personality that has been ingrained in someone for years. And so sales is usually the thing that our franchisees still will struggle with for the first little while if that is something they're weak in. So if their weakness is in sales, that's something that I can't do for them even if they're getting a bunch of leads. But if they can't manage those leads, well, that's still something I can't do for them and secondarily is leadership. 3, 4, 5, 6 employees and all of a sudden there's a big churn. They aren't really good at training them or they potentially, they have a personality that kind of pushes away employees or people don't want to stay with them long term. That's again, very hard to do for a franchisee. And so what I've had to realize over the past few years is I needed to make sure I can do everything else in the business besides those two things. For the, for the owner. I need to be able to do their website, I need to make sure that there's their marketing materials, good to go. I make sure that that Everything is oiled on the command center side and answering the phones and the emails and all the rest of it. So that focus on the two things that actually move the needle for their business, and that is selling more jobs and hiring great people. That's ultimately the only two things that will make a business great. And it's unfortunately the two things that I don't have 100% control of. Now. Do we make materials for sales? Absolutely. Do we have brochures and make sure that the website's optimized and all the rest of it? Yes. When it comes to leadership, do we have hiring material? And whether it be every single form of print, from business card to yard sign to door hanger to flyer, like everything you could think of, we try to do our best. We have a hiring, hiring portal, a place where they, the applicants can fill out their application on their website. Like, we try to do our very best. We get great graphics about the opportunity for an employee to start out in the field, become a general manager, and then become an owner. Using the 3F program, which we call franchise Fee forgiveness Program. They become a franchisee and they get their fee. Forgive, forgiven. After just two years of working. Like, we try our best to do all those things, but ultimately I still cannot hold that piece of paper in front of an applicant and go over the, the application questions and interview them and get references like, I can't do that for them. So what I've had to learn is I need to make sure I can do as much as possible and then let them focus on those two things that are actually going to move the business forward. So that was a little bit of humble pie with Mike Andy today. Learning about some of the stuff that I wish I would have known a few years ago and have had to learn over the past few years. By no means is Augusta Lawn Care perfect or the franchise perfect. You know, we've been ranked really well by Entrepreneur magazine and stuff like that, but those, those are like vanity metrics I really do not care about. Ultimately, the goal of Augusta Lawn Care is to change the level of professionalism in the landscape industry. And part of that, a big piece of that is size and scale and number of locations. No one's going to care if we stay at a hundred locations. It will not change the industry. It will not move the needle for the level of professionalism that we are trying to achieve. It will require 5001000 plus locations for us to actually achieve the goals that we have in terms of moving that needle of professionalism. And so Scale. And moving towards that thousand plus location marker is going to be a lot of growing pains. And me figuring things out and me learning. I'm only 26. I got a lot to learn. I don't know everything. I started this franchise when I was, what, 24. And I have learned a lot in the past two years, and I have a whole, whole lot more to learn. And I've made plenty of mistakes in those few years. And I hope that by having those mistakes in these past couple years, it'll make us only stronger, more resilient, more profitable, and ultimately come up on top. At the end of the day for our franchise and our franchisees, I want to make every single one of our franchisees millionaires. It's literally, I don't have any shame in saying that. I think they would spend the money a whole lot better than the government or where my tax dollars go. I truly believe they'll make better jobs, that they will be better representatives in their community and give back to their community. And so I'm very, very passionate about making them very, very wealthy. And along the way, it's going to be difficult. It's only been. It's been less than three years and I'm still figuring things out. I make plenty of mistakes every single day. And I just have to apologize. I have to realize I'm doing my absolute best and realize that in the long run, this will come out on. On the top, it will be successful, and I still make mistakes. And that hopefully some of those things made you feel a little bit better about the mistakes you're probably making in your business, too. All right, well, if that was helpful, check this video here. Talks more about how to go from zero to two locations, two to a hundred locations, and a thousand and beyond. Check this video out right here. Talks all about franchise, et cetera. It might be helpful. I'll see you tomorrow.