I turned down a $10M offer to buy my business...

Hey, everyone. My name is Mike Andes, and I'm not gonna lie, I'm pretty nervous about making this video. And I don't usually prepare for my videos a whole lot, but this one, I actually made some notes. I wanted to be open and transparent as I possibly can this channel so that I always look back to my younger self, what I could have learned from someone sharing the nitty gritty details and the behind the scenes of growing a business and sharing what was actually the tough times, not just after it's end of the game and everyone's cheering and it's a party fest. And so I want to share those moments as much as possible. And so I'm nervous about making this video because it goes against some of the things I've always talked about in terms of being very frugal, living within your means, not going into debt, and being conservative financially. And so to just kind of break the ice and say what's going on. Over the past few months, it has been a wild ride. We've grown Augusta quite substantially, and I've really been investing heavily into the businesses. At this point in time, we are almost 100 locations at Augusta Lawn Care. And this is the time that for most franchises, it is do or die. You either scale up from here or you drown and die. And usually it's because you lose momentum and then you eventually become obsolete elite, and you no longer have the money to invest into the business, and you don't have enough inertia to carry you through to 500 franchise locations and become profitable. And so people know this, venture capital knows this, private equity knows this. And so throughout 2021, especially the second half, I was approached many times by private equity firms wanting to buy out the majority stake ownership of Augusta Lawn Care. And I've made it very clear that I will never do that. I've promised that to the franchisees and I've made it clear on this chart channel because I feel like I'll lose my control of the brand and what we're trying to do with the industry. But I wanted to be open, transparent, and show everything that's going on. And so that way you can hopefully learn and hopefully be inspired potentially. And maybe you disagree with what I'm doing, but I turned down an offer to buy a majority stake ownership of Augusta Lawn Care and put the valuation above eight figures, above $10 million. And so it was a lot of money, and not gonna lie, I was like, whoa, I didn't expect that much in terms of valuation. And we were relatively young but we're growing very quickly. We have established a brand and we were growing very quickly. And so in that moment, it was like, well, I know we need the money, and I know that this is gonna be a really, really challenging next 12 months if we don't take the money. So at the end of the day, I decided that I would actually go into debt instead. And I'm going to go over a million dollars in the debt. And just to be clear, I am personally backing this loan with my own real estate, and I am not putting this debt on the businesses. And this does not include the headquarters that we are going to be building for Augusta Lawn Care. And that's going to be a 504 loan SBA, totally separate. So this debt, I'm going to explain why I went into this much debt and what we're going to use the money for. But I want to be very clear, and this is probably the part that I would say if I dug into it, it makes me the most nervous about sharing this video, is because as the visionary, as someone who's a leader, you kind of know where the business is going, you know what your plans are, you see certain benchmarks, and you have a lot of confidence in those things. And you've been with yourself as a business owner for long enough to have a lot of confidence in what those projections and your plans are going to be. That being said, when I think about my responsibility now, as the business has grown, not only to myself, I don't have dependence, I don't have a family. If I lost all my money, I would live in the same place. I now live in a one bedroom apartment. I just moved in. I actually own the apartment complex and I live in a one bedroom place there. And I really love it. But if I lost all my money, I'd probably still live there. It's one of the cheapest places in town that you can possibly get one bedroom, 1970s unit. And my standard of living wouldn't change a whole lot. I did just buy a new car, it's a Honda Civic, and it was my first non business, non Augusta lawn care vehicle. In the past since I started Augusta. And it's been great. I enjoy those things. But honestly, my standard of living, like, it's paid off. So, like, it really wouldn't change. I'd probably sell my car if I lost all my money. And like, there's not much that would change. I don't live lavishly. I don't do anything really fancy. So for me, it wouldn't Change a whole lot. I don't have dependents or family that I need to provide for. However, my biggest concern, the thing that I will not risk is the security of the employees and the jobs that I've created. And then also secondarily, is the franchisees at Augusta Lawn Care. Because still in its infant phases, Augusta Lawn Care is dependent on making sure that I am at the forefront, driving forward, making sure it's financially, economically viable, and ensuring that we continue to grow the brand so that it continues to be a better and better return on the investment for the franchisees. So those are the two things I will not risk. And that was the big determining factor when taking on this debt, is that is the line I won't cross, is how much debt can I take on that might put myself at potentially a loss, but. But is not gonna hurt any of the employees. We will never lay anyone off because of this, and it won't put any of the franchisees in financial harm. And so that was the line for me, and that was the challenge in determining whether I take this debt on versus if we go raise money outside from other sources. So that leads me to why I didn't take the money. Like, why didn't you just take $10 million and continue to grow the business and own 20, 30% and be happy, just be the CEO and you could still have the channel and all the rest of it. Just the bottom line is this. It ties back to what I just said, and that is me having $10 million in my bank account is not gonna change my daily life. Cause I love what I do. I love going to work. I love the people I work with. I love creating content. And I would not go buy a bigger house. I would not suddenly change if I had a bunch more money. So therefore, why would I ask for a bunch of equity and give away the thing that I love the most, which is the business, and being able to dictate change in this industry using that and give away the reins, the control to somebody else. I would never want that. And so I didn't take the money for that reason. I do not want someone else telling me what to do with Augusta Lawn Care when I know in the long term what's right. I know that it's very clear to me what the 10 to 15 year plan for Augusta Lawn Care is. And I've shared that with the franchisees. However, most venture capitalists, most private equity, they think in terms of five years is like the max. But usually it's more like two years, two to five years. And I know what they would do. I know immediately what they would do if I gave them control. They'd raise prices. They would take away the flat fee model and they would raise. They'd almost double the prices at Command Center. And so I know that's what they would do. And I know that in the short term, they would make a bunch of money and everyone would live happily. And I would be so mad because that's not the goal. That's not the end vision. It's not just extrapolating more cash. It's a matter of. The goal of Augusta is to change the level of professionalism in the industry, period. And I believe that we're gonna be able to do that in the next 10 to 15 years. And I truly believe that in five years, five to 10 years, people will say it is stupid not to join Augusta Lawn Care. I truly believe that. And people laugh at me now. People laughed at me really hardcore when I said that two years ago when we first started. But I think it's going to become more and more clear as we invest in the moat, the thing that makes us unique and makes us different. And so that leads me to a. What is the money going towards? Like, why did you need all this money? So we could have waited, right? I could have waited, and I could have waited maybe 12 to 24 months on a lot of these things that I'm going to talk about, But I needed this money to do really two things, mostly. One is we need to get the franchise to profitability. And I've been very clear with the franchisees, where we're at with all of this. And they know that we don't make money. We're still growing very quickly, but growth sucks cash the same way it does in your business. It does for Augusta Lawn Care. So we're growing like crazy. And you're more than doubling the number of locations around North America. We're over 80 now. It takes a lot of cash, right? And so we've got to get the. The franchise to profitability. And this will allow us to scale command center and really, really massively grow the number of staff that's on hand to be able to absorb all the calls for the spring rushes. And when. When, like, estimates and calls come in massive batches, and when you have hundreds of locations, it's not like, oh, you get a few calls, like, you could literally in a few minutes have a thousand calls dropped on you. And so how do we absorb that? How do we actually make sure that there's no voicemails that go through. And so I've looked at the past few weeks, there's not a single voicemail that's gone on any location across Augusta Lawn Care for weeks. That's awesome. But in order to do that and do that through the spring rush, we've got to massively scale that up. And it's not about just scaling up number of people. You've got to have training and then systems in place and tracking them and recording phone calls, including quality control, and constantly bringing on new people. And then you're always having a churn. Like it's a regular office, but there's churn. And so there's a lot that goes into that. Second thing that I need the money for is P4P software. And so this is something that is very near and dear to myself because I know what it did to my business and how much it changed my company. And it's not new, it's not anything like different. Like crazy. Like no one's not ever thought about paying someone based upon performance. But I truly believe it's a software that encompasses all of the components of a pay for performance model into one system. And it changed my business and made it much more profitable, allowed me to step away from daily operations and it allowed my employees to take over and be more accountable for their actions and make more money, a lot more money. And that P4P kind of mindset allowed some of them to become business owners and managers and move up in the organization because that mindset of performance and waste reduction and being lean. And so I believe in P4Pmassively. And so I truly believe that as I invest into the software and we have a whole team of engineers working on this, that my goal is in the next year to make it where it is, cash flow positive, at least breaks even on what I'm putting into it every single month. And I think we're on our way. I think within 12 months we can get there. And for everyone that has joined p4psoftware.com, I'm very grateful because every single dollar and a lot more is being pumped back into the product. And my goal is down the road to be able to take certain key data points based upon efficiency, based upon overtime, based upon which employees are most efficient on certain types of services, and be able to use all of these data points to be able to tell a business owner what they should be doing in their business, who should be working with who based upon their skill set and based upon efficiencies that's all coming down the road, but we're at the very, very infant stages of that. We're still trying to roll out the mobile apps right now. We just rolled out Android today. IOS is coming out probably next couple weeks. And so all of these steps we got to integrate with QuickBooks, we got to really improve the reporting and the dashboard. So there's so much I want to do with it and I want to add profit sharing and open book management, integrating that into the software. So employees, when you're doing profit sharing, they can actually see live throughout the quarter how much money is in profit sharing and then what that, how that's affected as the time goes on. And potentially there's mistakes that are made and things that happen in the business. So I'm like all in on two things. Augusta Lawn Care in the next 10 to 15 years will become the leader in the lawn care industry and it'll be extremely hard to compete with them if you do not adhere to the standards and the rule of the game that we play in 2P 4P software. I truly believe that without pay for performance, it'll be extremely difficult in 10 to 15 years to hire anyone that wants to work outside in the heat and in the cold. In the landscaping industry or any home service improvement industry. We have pool companies already using the software. We have roofing companies. Today he was talking to some pressure washing companies. Brad, who works at P4P. And so I'm just very much in the long term game. If you heard, listen to any of my content, you know that I think about the long term all the time and I'm very concentrated and I try very, very hard to not make short term decisions. Whether you look at the way that invests money, whether you look way that I look at religion or relationships or business, I always am thinking very long term. And so this in the short term, I truly believe in the next 12 months I will be called either a genius or an absolute fool for turning down millions of dollars and accepting millions of dollars in debt. I'm either going to be called a fool or a genius. But at the end of the day, either way I'll be glad I made this decision. I know that. And that's the thing that gives me the peace, knowing that this is the right thing to do and that is to make sure that I can retain control of Augusta Lawn Care because that's so important to me. And then two, that I make a positive impact on other business owners the same way that I was able to have with P4P. And so again, I do not care if in 12 months some people, if it goes well according to plan, people will call me a genius for the risk that I'm taking right now. If it doesn't go as planned, I know that I've not risked too much to where I have to lay off any individuals. And the franchisees will be just fine. We will still continue to grow. It'll be okay. I personally would lose out, I would lose real estate and things like that if everything went bad. I don't think it's going to happen. And so whether or not someone calls me a genius or a Fool in 12 months, I know I've come to peace with the fact that my lifestyle wouldn't change. I know I'd still be in a good place regardless of the downsides that this potentially could bring. But I know the decision I'm making right now, regardless of who calls me genius or fool in 12 months will make a positive impact on other business owners. And it will absolutely lead to a 10 to 15 year massive payday for my franchisees and for myself. And I truly, truly, truly believe that. And so the investments I'm making now, I hope that encourages you and your business to think about the 10 to 15 year term. Not the next quarter, not next week or month, or buying be getting paid out. Like I heard someone say this. That was very, very interesting. It was actually Grant Cardone, which most of you know, I take a lot of what he says in a grain of salt. But he said something that's really interesting. He said rich people sell things and wealthy people never sell. And I really took that to heart. That helped me a lot because I am not going to sell. I'm not interested in becoming rich. I am extremely interested in becoming wealthy and being able to do a lot of good with that wealth. And I'm doubling down on that. I am putting all chips on the table for this one. And, and like I said, regardless, if someone calls me a genius or a fool in 12 months, cause it'll be one or the other. I promise. This is the right decision for me and I look forward to what 2022 has and the years beyond. And I appreciate all of you that have supported this journey. It would not be possible without the franchisees. It would not be possible without all of the local employees that have made this happen and have stayed true to me even when we are struggling. And it's not possible without every single one of you that has supported me on all the different platforms. Mikeandys.com has all the different stuff that we do and, and it's new website, mikeandys.com, you can check it out all of whether it be lawn care, web design, landscape, business course, the book, like whatever you've helped, I appreciate that that's what's allowing this to happen. And for that I'm extremely grateful. And I was pretty clear, kind of hinted at some of these things because last year when I said I was buying, a couple years ago I said I was buying real estate. The equity in that is what I'm going to be able to leverage and I'm going to be able to lean on and secure this debt against. And so at the very worst, I personally will lose my real estate. At the very worst, at the very worst, in the best case scenario, this is gonna change the lives of my franchisees and myself and industry, other business owners in this industry over the next 10 to 15 years. And I truly believe it's worth the risk. So hope that was helpful. You too have risks in your business. You have things you're sacrificing and as I always say, sacrifice or regret, you choose.