I Wasted Years GROWING My Business Wrong!

Ladies and gentlemen, boys and girls, welcome.

To another live show. I apologize for being a few minutes late, having some technical difficulties, but we are ready to roll. Take your calls. And before we get started, I want to talk about the mistake that I made up. Probably cost me hundreds of thousands of dollars. And I know for certain, cost me years of just financial, mental, psychological damage because I was trying to run my business incorrectly. And I talk so often about simplification, and when I talk about simplification, I'm talking about creating systems in your business. I'm talking about taking out the most complicated, extraneous services that you're offering and just eliminating them and trying to create repeatable systems inside of a business. Now, you can systematize complexity. You can, but it's much more simple to systematize simplicity and then just take something that's very simple and create a system around it. For example, if I'm trying to create a system around pouring water, it's like, oh, that's really simple. I can just pour the water out. If I'm trying to take a system and create electricity from the pouring of the water, where you have a turbine and a generating system and a battery to create capture that energy, that's a much more complicated system for something that's much more complicated. So when you're talking about trying to systematize simplicity, it's much simpler to do. And so I would much rather create a system around something that's simple. Now, when it comes to simple services in your business, here's why. Here's my pitch for why you should simplify services. Okay. Cause I was listening to someone yesterday, a young entrepreneur in the lawn care landscaping game, and they're a client of lawn carewebdesign.com and I was watching a video or two of them.

They were talking about how they were.

Gonna ramp up their projects and gonna do, like, these ten $20,000 paver jobs. And I know exactly the conversation that's gonna happen. Now, of course, I hope it does not happen, but I've seen this rodeo enough to know what's going to happen in the next 12 to 24 months in their business.

And as they're going to ramp up.

Their sales, they're going to ramp up revenue. They're going to also have to ramp up the amount of capital expenditures and overhead. They're going to have to have an office manager. They're going to have more trucks and equipment and a shop space, and they're.

Going to ramp all of this up.

And then it's Going to come to the point where it's like people start to leave. They can't find enough employees that have the skills to install paver patios. They're going to have a really, really hard time trying to manage all of these projects. Their office manager is going to leave. These are all things that when you build up a business that has complexities built and baked into, opens you up to a massive vulnerability. We used to do artificial turf installations. Well, guess what? One day my artificial turf guys like, hey, I'm gone in two weeks, I'm moving down south. Okay. We had to close the whole division down, had to give back money for payments that had been given, bank deposits, because I'm not. I knew, I just knew that if we kept doing those artificial turf projects, I was going to be on the project the entire day, all day long. And that could not happen secondarily. We used to do wood chipping like we would have. We had a massive chipper, a big diesel, 16 inch. Is it 12 or 16? I think it might have been 12.12inch chipper. We would do tree chipping stuff. We, we used to have dump trucks, like big dump trucks. Like I'm talking, What are they? Seven, the L7 thousands and then the F750s of the world. Okay, Used up those. We deliver materials. Used to have three skid steers and track loaders at the one location that we first started with Augusta Lawn Care. And over the past three to four years, we've systematically removed every single one of those things. And it's like, well, was I so in love with scaling up the business and growing top line revenue that I failed to realize that doing so in a manner that was not systematic or simplified was, was going to basically lead to the next three to four years of just tearing everything I had built apart, Selling the dump trucks, selling the tree chippers, getting rid of a whole bunch of artificial turf that we didn't really need and that was basically scrap and selling it for pennies on the dollar. These are all things that I could have avoided if I simply would have taken what was simple, what was I knew I was good at and just scaled that. And regardless of what industry you're in, I don't care if you're in roofing, I don't care if you're in landscaping, I don't care if you, you are in cleaning. Whatever it is, you've got to ask yourself, do I want to try to systematize complexity and create a business that is a hundred different businesses inside of one or you only take one simple thing and just keep scaling that one thing out. And in this labor market, for all of us as home improvement professionals, you're going to have a better time finding frontline staff if you don't need them to have experience and you're able to train them up to a reasonable level of competency and profitability in a relative fashion of being, you know, fast. Like you got, you got to get them up to speed within a week or two in order to be profitable. Otherwise, if the average, you know, tenor in your location in your business is three to six months, which is very common right now, very common right now, for the average, like three or four months for entry level labor positions, you better make sure that you can make them profitable in a week or two. Because if it takes them three months to learn how to use this piece of equipment and how to install this type of service and all these different training procedures for this service, certain type of installation, if you're doing that, you.

Are not going to ever be able.

To become profitable because you're simply just gonna be churning out employees and there's just this constant cost that is involved with that. So I'm a big believer in simplification and systemization. And if I'm gonna believe in both of those things, I just truly believe it's easier to systematize something that is simple. And so do not get caught up into the game that I played six, seven, eight years ago where it was.

Like, if I'm gonna grow, well, I.

Can add this service and I can add this service.

And yes, you can.

You can build a million dollar business easily in any home improvement industry by simply adding more services. If you're doing landscaping, guess what you can do paver patios. Oh, we can do pond features. Oh, we can do excavation. Oh, we can install paver patios and fire pits. We can do outdoor kitchens. Oh, we can do mowing grass. We can do a tree trimming. Oh, we can, we can do fertilization, weed control. Like there's so many different things that you can do. Yes, you can. And you can build a million dollar business with 10 different services, all doing a hundred thousand. But I'd much rather have, I've said this consistently. I'd much rather have one service doing 5 to 600,000 in annual revenue, then a million dollar business that has 10 different services, all doing $100,000 a pop. Because it's very, very hard to train employees to be efficient when you have that many service services. It's very easy to have a massive amount of bottlenecks in the business when you have all of the different services because you have management, you have office people that if they leave at that size of business, you are toast. Because if you have someone that only has all the keys to the secrets of how to install concrete, how to do the paper patios, how to install those outdoor water features, if they have all that information in their head when they leave, guess what else leaves? The revenue that is in that sector of the business. So I'd rather build a business that it doesn't matter who is in the business, it doesn't matter who is employed, it doesn't matter what cog in the machine is there. The machine will still work. And that means that if I'm not there, it's fine, it'll still work. It's simple. I don't need my head and my intellect and knowledge about this type of equipment, this type of service and how it perfectly needs to be done.

I'm not going to have to be.

There in order for the machine to work. So let's go ahead and jump into some questions. We're going to take some callers. I'll answer what's gone on so far in terms of questions that are in the chat here and then please hop on the phone call. It's 361-733-3333 is the phone number right there down on the bottom of the screen. So make sure you hop in the queue and we'll go ahead and get started.

See here.

Pricing mowing by the job versus by the man per man hour. How does pricing by job scale compared on compared to by man hour? The problem with buy man hours as you scale and you have a whole bunch of employees, if different people are doing the lawn, the price the customer is going to constantly fluctuating. And even though you can make a.

Really good case to the customer as.

To why they actually would save money doing that, it's still very difficult for them to see why. This week it took them whatever amount of minutes and it cost $28. Next month cost next week it costs $46. The next we have that cost $31. I'd be much more. You have a much more customer centric business by just having a set price and really there's gonna be fluctuations in how long it takes them to mow the lawn.

All right, Am I able to call from here? You can, yes, call the numbers below. Sorry, I was a little bit late. Hence the reason for Angie and TaskRabbit this is a great point. Because so many business, so many owner ops get sucked into the pavers, tree work, et cetera, because they make more money, but it's not scalable because you cannot scale it yourself. Think bigger. Yeah. And it's not to say you can't make money doing it.

Right.

And the reason that people usually get sucked into or convince themselves that they.

Should do it is because there are.

Companies that make really good money. And you know, there are custom design build Companies that charge $150 to $200 per hour for their employees to be working and they do really, really detailed, highly skilled work. My question is though, what happens if you can't hire those people? What happens in a labor market when it's very difficult to find people, let alone have experience, have skill and have years of the of doing that work? Very difficult to find. And so what most people get sucked into is the fact that they're going to see a video about someone bunch of money doing tree service. But guess what? Typically the owner operator is very involved in that business. Okay. And if you go on social media and you look at people that are design build and they are talking about their business and how much money they make and they're 30, $40,000 paver jobs. You also watch some of the other videos. What are they doing? They're delivering materials, they're delivering trucks and equipment. They are involved in the businesses, they're talking to the customer. They know what's going on with every single job. Because it's very, very hard to systematize and scale up that type of operation. Okay. And so yes, you can make a lot more money, but I would much rather make a dollar per hour but be able to do that a thousand times with a thousand employees, Make a thousand dollars per hour, then make a hundred dollars per hour, but only be able to have five or six employees. Because you create, when you create redundancy, you are inherently de risking the business. Okay. When you can create a system that allows a lower level skilled employee that is much more mass market to be able to be efficient and profitable inside that system, you're inherently de risking the business. Man pushing buttons. I hope you guys didn't hear some sort of weird sound there. Okay. All right. Is there any callers? There's always the same thing happens every single time.

We had a whole bunch, we get.

A whole bunch of people not, not calling in. And at the very end I have to kick people out of the queue doing exactly what I am doing. Ready, doing, ready for next year. Cutting back even more services, mowing, treatments and hedges.

Who is your target customer?

And do you think going after middle to high to high income will be better outlook given market conditions? Maybe inner city small yards versus big homes in suburbs?

Again, it really depends.

Like if you're trying to systematize mowing, for example, I don't really, I'm not a huge fan of massive properties because there's so many moving parts to it. And typically when you get large properties you start getting economies of scale with bigger equipment. And so it seduces you into buying more equipment when you don't have as much labor. And so that's what typically people into massive capital expenditures and loans and debt is buying bigger and bigger equipment because they have these one acre, two acre parcels of these massive estates that they're doing. They have full service and I can eat mulch. I need all these other services and get them sucked into this treadmill of adding more services because these big clients want them. So I'm a big fan of like, you know, I want these tract homes that are, you know, middle average, you know, middle class homes. You know, in my market that is like a five to seven hundred thousand dollar house that's like, that's the kind of middle class in my area, those kind of track homes, those, those neighborhoods that again in my area are 3,000 to 8,000 square feet of turf. Those are the ones that we really, really love the most. All right, we got caller. Let's go ahead and hop into the first ones coming from Victoria, Canada, bc. Welcome to the show. Thanks for coming on.

Good, good. What's your.

Totally. Yeah, so you can still do P4P if you're doing the 12 month contracts, if that's what, what you want to do with the business, you'll just have to change the budget hours appropriately for each visit.

Right.

So you can't just say okay, if it's $400 per, per month, I'm just going to put, you know, eight hours over the course of that month. Well, sometimes you need 12, 20 hours because it's spring rush and other times you only need two hours because they're just blowing things off. Right. So as long if you're level billing like throughout the whole 12 months, that's fine. Just change your budget hours based upon the actual demand for those services throughout the year. Does that make sense?

Each visit? Exactly. So for example, if you're like, okay, they're going to charge, I'm going to charge them $400 per month year round, it's $4,800 for the year. Let's just assume, for the sake of keeping it simple, you're charging $48 per hour to the customer. That would mean 100 budget hours over the course of the year is what you've allocated in terms of labor for that job.

So now it's like, where do I.

Put those a hundred hours? Okay, well, I got to mow them 30 times throughout the year. Great.

It's an hour per time. Great.

There's 30 hours. I have 70 budget hours left. And then just allocate your budget hours appropriately. So every single visit has accurate budget hours on it. So when they show up to the job, it's not a matter of like, oh, I've got to read this whole contract. It's like, what one service am I supposed to be doing? And the budget hours are accurate for that one thing. Make sense?

Cool.

Awesome, bro.

You have a great day. Take care.

All right.

Next caller is coming from.

I believe it's Iowa. Davenport, Iowa.

Welcome to the show.

Thanks for coming on.

Hey, Mike.

I have a landscaping company.

Go for it.

Yeah, like, I think, you know, if you're in an area where it's very common. Do you do snow? Like, for example, in our area, it's like super hit and miss, right.

We either have hardly any snow, or.

We have two or three snowfalls and we'll get like a foot or two. Right. And so it's very hit and miss that usually the more hit and miss an area has in terms of snow, the higher you can charge per hour because less people have the equipment. Right. If you live in certain parts of Canada, for example, where they're under snow for six months out of the year, everyone has a plow, Everyone has some sort of snow removal device. And so you're charging way less per hour compared to, you know, where you're at. Where I'm at where we're charging hundreds of dollars per hour, you know, 4, 5, $600 per hour for having a snowplow on, on site. So, you know, definitely having something where it's like, hey, we're going to charge you X amount for the winter, and we're going to take care of your, your snow services, period. I like that.

Especially in your market where it could go two or three times, it could.

Come 10 times, and just realize that it's gonna be great for cash flow. And there's gonna. But there's also gonna be those, those.

Those winters where you do get 10.

Snowfalls and now you're kind of losing money and that stinks. Right. So I think that model works best if you, oh, if you own all the equipment outright and you don't have debt on it because then you're, you're basically just paying for the extra labor in the event that you do get more snowfall. If you have a whole bunch of capex and loans against, you know, trucks and snow plowing equipment, you can't afford to go through a winter and have a whole bunch of snow plowing happening and you're not getting paid any more for it because there's now 12 snowfalls this winter.

Right. So I think especially if you have.

A very low debt structure, you could probably make that kind of service work. It's like, hey, these four months out of the year, regardless of how much snows, here's who pay us every month. And then customers usually like that.

Do you do residential or do you do commercial when it comes to snow?

Okay. Even for snow.

Got it. So here's an idea for you, and this is what I would recommend. This is what I would be doing in your market and that is I'd be trying to sell a customer on a bi weekly service throughout the entire winter months, regardless of it's snowing or if it's not. And if it's not, here's the services that we're doing. If it does snow, here's what we're going to be doing and then you sell that. So that way you have more stability in terms of workflow throughout the whole winter. If it's not snowing, you're like trimming bushes, you're edging, you're pulling weeds, you're picking up debris, you're raking out the beds, you're checking the gutters, you're trimming the bushes off of the house, like all of those things. And then if it does snow, you're obviously pushing the snow, putting the salt down and you just literally give that to a customer. You know, as you're in the fall, you know, the fall season, like, hey, why don't you sign up for these services? It's this amount per month or this amount per biweekly service or however you want to break it down. But regardless if it snows or not, we're going to take care of your property.

And I think a lot of people.

Drive with that because they don't need a landscaper and a snow service. It's like, hey, I just want to pay the same amount every single month throughout the winter. And regardless if it's snowing or if it's Not, I want you guys to be showing up on a consistent basis. And the thing with snow is they.

Don'T want to wait three more, four.

More days till their bi weekly service is scheduled. So you just move those up. So if it snows tomorrow, like, obviously you can't go to bush trimming. Well, then what we're going to do is we're going to take everyone who's on service and just put front them and go, snow, snow. Do snow plowing for them. Does it make sense?

Cool. Best of luck, brother. Take care.

All right, next caller is coming from. It says Denham Springs, Louisiana.

Welcome to the show. Thanks for coming on.

Absolutely.

What's up, brother?

Do you have a finder's fee or do you just say, hey, sorry, we don't do that.

Hey, one second. I just realized that my mic is coming through my computer instead of my stereo thing here. Give me one second. I think people should be able to hear you now. One second. I'm have you repeat that, that, that one more time. Give me one second here.

Okay, everyone, can you hear that? I'm working now. All right, we are in business. Go ahead, answer. Ask that question again and we'll jump into it again.

Okay, no problem. Business again. So basically I've found that our simple service is flower beds. My guys are really efficient at that. I've got a designer where we can just do flower beds. We can get in and out and be really profitable on it. My question is, how do you handle when people call you and you don't offer that specific service? Do you just give them somebody else's number and try to get a finder's fee? Or do you just say, hey, we don't do that or whatever, you sub it out or what do you do?

Yeah, we typically will just refer them off to someone else that we know does the service. I don't think it's really worth trying to find a finer's fee. Like I think what comes around goes around. And so if you can link up with guys in your area that say, hey, I do this really well. Okay, great, you give me those customers, I'll give you my mowing customers or however that works. I think that works really well. We don't really do a finder's fee thing or we don't try to subcontract. I just don't. It's just too much to track. And honestly, I just rather. We usually have like a list. Go ahead.

No, go, go ahead.

I was just agreeing because that's kind.

Of where we're at.

I'm actually trying to do that with your franchisee in Baton Rouge or in denim. And we've been giving them a lot of work. I was trying to figure out if there was a way to. Because we don't cut grass at all. But. But I think you're right. Just, you know, what goes around comes around. But go ahead.

Yeah. For example, like, you know, him. Him, for example, Dylan's not going to do massive contracts or. Or, you know, in terms of commercial stuff, and he's not going to do big projects. Right. So he'd want to hand those off to you anyways. And so I think, you know, in our local market, for example, like, I know all our. The guys that we kind of refer off to now, and. And the big thing is, like, if they ever. If they ever try to steal our customers away from the service that we are offering them, that's an immediate. Like, they're off the list. Right. I also know that there's a couple on, you know, local guys that have built their business basically just on the back of our referrals, because we don't do a lot of services. And so they also are going to say good things about us. They're going to give customers our number if they don't do those services. So ideally, you're linking up with people who don't offer your core competency, and then you don't offer their core competency. Right. That's the ideal referee. Or same thing with service area. Like, they service the area. This part, you service area, your service areas. Over here, it's easy to just be, you know, exchange customers that way. It gets a little bit more complicated when you basically offer a whole bunch.

Of services and you're, you know, referring.

It over to someone else who does the exact same thing because they could just take, you know, your customers away from you. But that's why, again, specialization into what services you want to offer is so much more beneficial, in my opinion.

Yeah, I agree. And that's where we're at. Just solidifying that, hey, we're good at this. We can do it fast but not waste time with anything else.

Absolutely. Awesome, brother. You have a good one. Take care.

All right, Mike.

Appreciate it, man.

I talk to you. You too. I very much apologize for the audio on the episode so far. The fact that it was getting picked up by my computer instead of the actual microphone is just absolutely appalling. So let's go ahead, though. Next caller is coming from Shreveport, Louisiana, to Louisiana's back to back welcome to the show. Thanks for coming on.

Hey, Mike.

Hope you're doing well, brother. This is Garrett. We're doing Grange Fine lawn care.

I was the one asked a question about pricing more per job versus per man hours. So I'm just a little confused, man. So when I say for job, I mean like, so how we came up with our hourly rate is like total expenses divided by hour. Right. And so we're accounting for the overhead and one man hour. So basically we could do we have a two man crew, right? It's me and one helper and for one hour, if we're going by 52 per man hour, we should get 105. But where I'm confused is if I'm at 52 per man hour and then my helper's with me for one hour, it's. It's like we're accounting for overhead twice and it's almost like should we, should we do it for job per se and not account for that overhead twice? You know what I'm saying? That's kind of what I'm trying to figure out.

Yeah, I think it's become really popular.

Because we are trying to grow.

Go ahead.

Because we are trying to grow.

So, yeah, so.

This is an unpopular opinion. Might get me in trouble. But I think it's become really popular to try to do your pricing based upon overhead when that is not the metric by which you should be setting your prices. I think your prices, the prices that a customer will pay, is determined by the value that you offer. And so determining, okay, I should charge X because of my costs and my expenses is a flawed way of setting your prices, in my opinion. I think it's more a matter of what's the value I'm offering to the customer, what can I charge in order to maximize my profit and then everything else in terms of expenses, the defensive measures, that is great to be able to track, know what your margins are, know what the ratios are, et cetera. But to be able to say, oh, I'm going to look at my costs and I'm going to tack on some profit margin on top of that to account for overhead recovery and then that becomes my price. If that's the standard, like, you'll never be able to maximize profit because what happens? Why would you ever want to lower your capex? Why would you ever want to pay off debt? Why would you ever want to become more efficient if your pricing to the customer is based upon a finite measure of your, of your overhead? If you. I want to reward you with more Profit when you reduce your overhead. Not say, oh, well, on top of my overhead and overhead recovery, I'm tacking on this profit margin. And so in my opinion, I'd be much more focused on what can you charge the customer based upon what's your close ratio at? And maximizing that and then everything else in terms of overhead, obviously, keep track of it. Obviously, you know your numbers. You're tracking enough to know what that is per hour and all the rest of it. But that is a defensive mechanism determining your prices to be strictly based on what is the customer willing to pay. And that's going to be strictly based upon what is the value you're offering them. And I think the reason we've gone down this path of, you know, okay, well, let's determine the cost of every single piece of equipment and determine my hourly cost and my overhead recovery, and then I'll bake it up, you know, 20% profit margin. You're working backwards. When really all of that is coming to an hourly rate that the customer determines based upon your value, not based upon your cost. They're not gonna pay $5 more per hour because you have debt or because you've got an office person or because you got a new shop. They don't care. They just, what's that dollar amount? And so I'd be focused much more on the fact that, like, okay, can you charge 65 instead of 55? Because if you can, you should do it and then figure out overhead structure and reducing that and maximizing margins. But I think it's a flawed way to build your pricing, and that is the opposite, which is, let's build my expenses and then tack on profit afterwards. Because why in the world would you ever want to reduce your overhead now? Why would you ever want to reduce your expenses? You're essentially just passing along that freebie to the customer. Does that make sense? I know it's not what you're doing, but it's just the way that you've thought about it is more a matter of determining your hourly based upon your overhead. When the customer doesn't care about your overhead, does that make sense?

Absolutely. Man, that helps a ton. Thank you, brother.

Cool. I think that's really important concept. And I think a lot of times when I look at a lot of the quote unquote influencers of, like, older generations, and I'm not gonna say names, especially ones like when I went to Gie years ago and I'd hear them talking, it's like, why are we doing all this math about how much a truck costs per hour and an employee like, I get that it's good to know your numbers, but that should not be the determining factor of what you charge per hour. I truly do not believe that. And I'm sure people disagree with me on this, especially people that are really good with their numbers.

Because you fall in love with makeup. Sick.

Sorry. You fall in love with knowing your numbers and that determine your pricing when that is not a determining factor of what the customer is willing to pay. Because then like you got, you get the picture. I truly believe it's like, how do we determine what we're able to charge based on our value? And this, the thing that most of the time determines that is your close ratio. If you have a 90% close ratio, it means that there's excess value into what your price, what your price is the customer. And you should raise your prices. If you're a 20% close ratio or 10% close ratio, probably a good chance you're not providing enough value to close enough deals and your prices compared to the value they're offering are too high. And so you've got to be so focused on how do I improve value so I can improve prices. And then go figure out your overhead. But do not build your infrastructure and your pricing based upon what's my capex and how much debt do I have and all. Okay, then I'm going to add 20% profit. I'm tackling this profit and there's my hourly rate. That's not how you do it. That's literally using defense to create an offense. Your offense is your pricing, your expenses are your defense. Do not use your expenses to determine the way how offensive you are with your pricing. Your pricing should be based upon what is the customer willing to pay for the value that I'm offering and how do I maximize the value so I can maximize the price and maximize my margins. And so I see this time and time again. And the reason that is like this, honestly, just to be perfectly honest, because I know the back end game, you can sell this really well because it makes it more complex to figure out your pricing. Okay, I would much rather, I would much rather maximize my profit using my close ratio as a proxy to know what my value to price equation is for the customer and then work backwards on figuring out my profit margins by then figuring out all my expenses and being like, okay, where can I cut that? If I took out this, I make 2% extra margins. If I made this more efficient, I'd be able to. That's the way the game should be played. But when it comes to consultants and speakers, it pays really well to make things complicated. And determining your hourly rate can be made complicated. You can sell a lot of stuff around this. You can sell worksheets and courses and speaking gigs all around. The fact that you determine pricing based upon your expenses, in my opinion, that is completely flawed.

That's your hot take for the day. Next caller is from. It says something landscaping. So five five one number. You're on the show. Thanks for coming on.

Hey, Mike, can you hear me?

I can. What's up?

Hey, what's up? So I'm over here in New Jersey and, you know, going into winter.

Our.

Season is like very, very cold. Nothing's really growing. And let's say we want to do winter services. How would I go about that if nothing. If we already did most of the services throughout the season and, you know, there's not much to do.

Yeah. So you just got really creative.

Is there any other recommendation you got.

To get creative of what services can be done during the winter if you're not doing snow? Right. And so we got to realize typically during the winter you're going to have windstorms and you're going to have, you know, the leaves kind of, they fall off in the fall, obviously, but then they kind of trickle down throughout January, February, and there's still some hanging on, depending what type of trees you have in the yard. And so you just need a windstorm every couple of weeks. You just need, you know, a really good rainstorm that makes things, you know, kind of look bad in the beds. But you just got to get creative. Right. Like raking out the beds can happen consistently. Blowing things off can happen consistently. Raking up the leaves, trimming the bushes off of the house, checking the gutters. You don't have to clean the gutters out. Just check them, make sure that they're not. There's no downspouts that are clogged up. Especially in a place like New Jersey where you get a lot of people that are retirees or snowbirds and they fly down to Florida or elsewhere. They absolutely see a lot of value in having someone at their property just to check on it every couple weeks. And so you are selling peace of mind.

Right.

You are selling. You're an insurance policy on their $1 million house, and they're literally paying you a couple hundred bucks a month for you to have eyes on the property, make sure nothing looks stupid. And that can be part of your winter services is like take pictures and Send the owner if there's any suspicious activity. That's a lot of really great value to someone who owns a million dollar house and that's the bulk of their net worth. And they're down in Florida for four or five months. So the value equation again, for someone who has, you know, two houses, three houses, a bunch of businesses, a high net worth is very different compared to the average working citizen.

Yeah, makes sense.

Okay.

All right, man. Thanks so much for your time.

You got it, buddy. Take care. All right, cool. Let me go ahead through some of these questions that were coming in here. Feel free to still call in. There's a few more calls in the queue, but let me just go through some of these questions. 361-733-3333 is the number. Give me a call, answer a few more questions. And I apologize for the first half of the show being completely on bad audio. I have to manage like four things when I'm on these live streams. I have to manage the audio for the caller off of this device. I have to manage the live stream, I have to manage the questions coming in, and I have to mix it all. So it's. I don't look at all the feedback coming in live. So thanks for letting me know. Cool. And the difference, this is just one of the comments here. And the difference would be fixed versus variable costs. We would need to compare the cost of each person as he grows in order to find the overhead per person, labor, office, sales, equipment, etc. Don't know if Mike knows it, but he's talking profit first stuff. What, what are the customer feedback mechanisms you use to determine your value in pricing besides closing costs and cancellations?

Obviously surveys and reviews are an important part of it, but I truly believe that just measuring attrition and your closing ratio is a massive indicator of value. And customer service is the only things that matter because surveys can be manipulated when you give them the survey how fast after the service is completed. There's so many little fine details that make a survey with a response rate. Most surveys people will only respond if they're in the extraneous end of the bell curve, either really mad or really, really happy. So you miss out on this huge, massive in between, which is the bulk of your customers. And we talked about this at Command center, for example, like, well, should we have where people have a survey after the phone call and then that is somehow tied into the way that we pay the person on the phone as a rep. The thing is, again, you're not like, when was the last time you stayed on the phone after talking to a phone call, like a phone rep and you did the survey, I guarantee you it's less than a quarter percent of people. I have never ever, ever, ever stayed on a phone call when it says like there's a survey after this and I'm like, I'm out, sorry, just not doing it. And so what that means is I'm probably in that middle of the bell curve. The only people you're going to get are really, really hot, really mad at you, or the ones that just love the person to death for some reason. Right. And the majority of your revenue is coming from people who are not even getting surveyed. So I rely on the numbers of the and the mass of close ratio that's going to determine my value and then my retention or attrition same. It's just the inverse, right? So attrition very commonly lawn care and landscaping is between 20 and 30% just because people pass away, people move, they sell their house, whatever it might be. But if that becomes 60% all of a sudden, very good chance you have a problem with not the funnel, like the top of the funnel, you might have plenty of good closing ratio coming in. That's, that's the value prop. But then you can't deliver if your customer service is bad, if you're doing a horrible job, et cetera, then that's going to relate to a bad ATT attrition. So I look at as like funnel and sales and bringing more customers and the value proposition simply tied to the closing ratio. It's the number one thing I look at. And then in terms of retaining, like you can't have holes in the bucket and keep pouring money into the bucket, you know, pouring more customers in, more lead like all the top and then have all these, have the leaky bucket, all these holes and losing customers every single, every single week, every single month, every single year. And have a bad attrition rate. So anything over a 35 attrition rate I start to get afraid of. And anything under a 30% closing rate I get concerned about too.

Mike, answer the question. We all want to know how much wood could a wood chuck. Chuck.

Chuck Chuck.

Oh man. Connor.

Cool. Extra dry rents, extra winter services. Cool. Closing ratio also determines expectations if you are on the higher side. Correct. What have you had issues with sales folks overselling? We do a lot of simple services, right? So when, when a customer asks for thing about simplifying services too is people don't have to have a design. They don't have to have a lot of talking through what the service is going to be like, the end result. What is, what are we selling? We're going to mow your lawn. It's going to go from yay tall to yay tall. Like it's not going to be a big, it's not a big selling thing, right? So you can't really oversell that, right. It's like we're going to edge it. We're going to make straight lines and we're going to cut your grass and we're going to bill you and it's going to be a beautiful thing. Like we can deliver on that. What gets, what gets hairy is when you start having like design build and you really can oversell a project. And we did run into this back in the day before we cut out like now, even if you, if you went to like Landscape Summit the past couple years, we would talk about how we were standardizing our projects, right? Like walls. We'd only use one type of block, one type of color paver patios, one type of design, one type of block. Like it was very, very standardized. We've now removed that, right. So we just gone complete simplified systems and simplified services to the point where we don't. We. You can't oversell it. It's like we're going to trim your bushes. How do you oversell that? I don't know. We're gonna put like some special solution that will make them bud better. And like we're just. It's hard to oversell, honestly. And so you know, when you're selling, mowing over the phone, when you're selling these services over the phone or drive by estimates, there's not a lot of interaction even with salespeople. But if you were doing project based.

Work, let's just assume you're doing project.

Based work with the landscaping construction of any sort. If you're having a problem with overselling, you, you need to standardize what they're saying and what you offer and templatize what is given to the customer in terms of promises. What promises are being made must be delivered on. And if they're not being delivered on, they probably need to be standardized. So that way you know when, hey, this is what a paper patio looks like. Here's the exact steps and it doesn't change regardless of what the customer is asking for and what it says in the estimate. And everything exactly the same and how you sell is exactly the same. That's only done through standardization of that project and making sure that it's done the same way every single time.

Are you a fan of itemizing quotes? Yes, I'm a big fan of itemizing quotes. I just made a video@landscapebusinesscourse.com I actually did a video of me doing a property cleanup as a drive by because we like drive by estimates, not scheduled estimates because you can do way more of them in a day. And so I went out and did one actually, and I showed a video of me doing it and I showed how I chunked the estimate down because I looked at this massive quote property clearance, like, hey, this could be like $4,000 or it could be four projects that are $1,000 a pop. So I'm a big fan of itemizing. It prevents you from how to do work, change orders. And it prevents a lot of back and forth the customer. And it also allows them, if they have a problem with price, for you to negotiate based upon what they want off of the estimate. Okay, Mr. Jones, you're right. I'm glad your budget is $2,000. I have four items that are on a thousand dollars a pop. Which of those two do you want? Now you're negotiating on what's in the estimate, not based upon the price. If you do this massive estimate with all this information and now they're gonna, what they're gonna do is they're like, okay, I want all that stuff. I gotta negotiate this number, this price. I'd rather them start thinking, okay, here's these four chunks. Which of these chunks can I live without if I want the price to come down? And it's, it's much better in terms of negotiation. Should check out Andy Molder and Mulder, Outdoor Solutions for Landscape Summit. Check. Great landscaper. If you need another speaker. Hey, Connor, send me his info.

Off topic question. Do you have problems trying to get women when working so many hours? You mean like women? Oh, mercy. Goodness. I'm not really in the game, so.

Okay, cool. Any more questions or callers? I was gonna stay on for an hour, but I apologize. Like, I lost a lot of people with the audio issues. I apologize for that. That's, that's my bad. My bad on a Saturday. Cool. Awesome. Well, thank you all for hopping on here. I think the big takeaway from the day is the simplification of, of your business. And I consistently see especially young guys in the industry, maybe landscaping or construction. It's like we are so motivated on getting the revenue and I fell in this trap too. We grew to a million dollars in like three years. But I added way too many services and ended up me being so stressed out and me doing all the project management and making materials were delivered and making sure they were delivered and the plants were delivered and making sure that things all aligned correctly in these massive projects. And then, you know, training people on new services like artificial turf.

We spent.

Spent thousands of dollars training on how to install artificial turf, and we got all the supplies set up. And it's so exciting. And everyone loves to, like, set up a new lc, set up a new website, and start a new service. Like that is like the epitome of entrepreneurship in the construction industry. And it's just not profitable. And I consistently see the companies that are most profitable are the ones cutting out services, not adding services, usually people. And the adding services are the people going up, up, up, up. And emotionally, they're getting tied and tied more to them. They're getting more and more wrapped up in their business. They're getting more and more overwhelmed and overworked. And their business is becoming more and more fragile because it's dependent on more and more of them and more skilled employees, which are harder and harder to find.

How about, how are the 30 inch Toros? We don't have any Toros. We used X Marks. I think in a vlog. Next week, Marks is going to break down the cost of those. We've kind of moved away from them because they're so heavy, and the cost of them has gone up so much over the past couple years. How do you go about billing people for lawn mowing? We have locations that do everything from daily billing to monthly billing and everything in between. How to scale up on leads quicker. How to scale up on leads quicker. There's like a hundred, you know, marketing, et cetera. There's a whole bunch of stuff. I have yard businesses and I have two crews. I have a maintenance crew and a cleanup enhancement crew that does all the skilled labor here. You know what? Go. Let me go ahead and take this off and I'll just answer questions here because this seems where everyone is at right now. I have a maintenance crew and a cleanup crew and that does all the skilled labor. The maintenance crew does 50 clients a month with 25%. Okay, sorry, your question got cut off. Feel free to comment. Again, any advice for a solo guy trying to hit 100k? I would simply say you just need your sales boots on and focus 100% of your time on close ratio. It's the only thing that matters. Until you hit past a quarter million in revenue, it's just close Ratio, it's the only thing that matters. And simply find your close ratio. You take the number of estimates that were accepted divided by the total number of estimates that you gave out. And if that number is of under 50% and you're trying to scale up, you have a problem. All right. It's the number one way to grow your business is just improve your close ratio. And that can be done in a whole bunch of different ways. It can be done cutting price, it can be done getting your estimates out faster. It can be doing estimates over the phone so they don't go call five other competitors. There's a hundred different ways to improve your close ratio. What's the best way to get people to go weekly? I'm in Texas, by the way. We found the best way to is to charge a higher price for bi weekly so they can't just switch by the cut and we charge 50 more when they go from weekly to bi weekly. Remodeling. Very cool. Why are you called lawn care? TNR Clean care? I do remodeling. I think remodeling during like the winter services or during winter time is a good move for a lot of guys especially who are handy. I'm not super handy. So it was never really a temptation. But the problem is that it's very again very, very difficult to scale that into where the average lawn care employee throughout the summer can then switch to being coming a remodeler during the winter. How do you recommend doing Christmas lights and when should we start marketing? A whole bunch of the owners at Augusta Nation are doing Christmas lights and we did a whole bunch of training this summer on it. We are not doing it on my current local market just because I don't want the guys on on the rooftop with ice. It's just I know I'm putting money on the table. It's a great service but a lot of them are doing it and they're starting in July. They call it July, Christmas in July. They did a whole bunch of emails about it. And yeah Mike, our website ranks well and we the highest rated contractor in our area. But our leads have dried up. We have capital. What's the best bang for your buck ad wise? Do you recommend any companies to advertise? We have uniforms, logo trucks, etc. I think the number one thing that I would say to someone who has it sounds like a pretty sizable business is I see consistently people are not farming their current database. And you're not asking for the upsell, you're not asking for the cross Sell. And so that would be the number one thing I see consistently with locations that are pretty sizable and very, very established is they're not, they're not farming, they're not trying to get more leads and upsell more services to their existing customers. If you offer like three or four services and someone buys one of them, your only goal in life should be trying to get them to offer to buy number two, three and four. Because why would I go? This is what's happening. You offer one service, let's say it's mowing and you got mowing customers and you're going out and trying to find new customers to do mowing or leaf cleanup or fertilization, weed control or mulching.

Or property clips or whatever it is.

When all you should be doing is taking this person you've already sold to and they've already purchased from you and they already liked your product and service and you should be focused on getting them to go from two to three to four to five services. That is much simpler and a much lower customer acquisition cost. It's just going to mean that you need to stay in touch with those customers and ensure that you have great customer service. Those two things alone will allow you to double or triple your business. Can you go over the pros and cons of four day work weeks? What did you all end up doing? So we tried four day work weeks. Every employee, when they're getting burnout, always seems to bring that up to us. We tried it out, they ended up wanting to go back, mostly due to the fact that a call out on a four day week makes it even more pressure on the guys who stay. So we just consistently saw that being the case. And then what would end up happening is we'd end up having to call people back on the Friday anyways because people would call out. It's like now we're missing 25% of the work week if you call out versus 20%. So when you have a large company, that's going to mean that multiple people are still working on Friday, which means now the office is still having to work. The manager's doing stuff to work that day anyways. So now they're working even longer hours. And then people start complaining when they're working like 1011 hour days. Like 1011 hour days on a four day work week is full time. And so yeah, if you start work at 7:30, you're going to be getting off at 5:30, 6 every single day. And if that's going to be too much for you Then five hour, five day work weeks is what you're going to need to get off at 4 or 4:30. Like it's just math. But they I understand when you're working really hard, it's very tough work. You're out in the elements. You can get really discouraged. Like man, I'm not getting home till 6:30 o' clock every 6:30 every single evening. I'm not able to eat with my family. Yeah, you chose to have a four, four day work week. So we've tried it. Guys wanted to go back. I know that there's plenty of people that, that do enjoy it and it's worked really well for them and we do definitely try to make our fifth day shorter day. That's like the goal. Either have it where it's off or it is a shorter day. Like they're only working 6, 7 hours and not working 10, 11, 12. That's kind of the goal.

Appreciate the advice. Two years ago I switched full time to only remodeling and I doubled my income from about 30 to 60k. But I'm struggling at the 100k mark. If you're, if you're doing full time, let's assume that's you know, 1500 hours of billable time in a year. That means that if you're doing 60k you are charging $40 per hour. So I would highly recommend doubling that. If you are a remodeler and you are good, you can charge 70, $80 every single day of the week. And if you multiply it by 1500 billable hours in the year you're making above 100k right there. I have, I just changed, I just never changed the name of the business for obvious reasons. A plain. Oh, I see what you're saying. Gotcha. So you had a lawn care business and you switched over to the, to the remodeling side of things. What's important on Google other than the review to rank up in top three in your area. That's the number one thing you want to be focused on. Obviously Google reviews are really important to be able to rank also in the Google listings. Google, Google local services, you know, all of those things are paid obviously at the top. Google Ads, etc. We had a drought last month and a lot of customers pushed us off for three to four weeks. When this happens, should you still charge or just wait it out? Push this offer three or four weeks. When this happens, should you still charge? Okay, I'm guessing you're talking about mowing. Like if someone say, like hey, cancel service for us because we charge a premium, an additional rate if they are not on weekly. We can usually keep them on weekly service even though they it might be a drought or it might not be growing as much because there is a significant price bump. And if they cancel one service we're going to go to the next service and give that the price bump.

Didn't try a four day. We could get asked. I don't know who James is, but we did. What's the best way to collect reviews from clients? Definitely after service, just having an automation where they're able to.