I’m Drowning in DEBT & Buying NEW TRUCKS!

Dude, those are nice trucks. Dude, that thing's huge. That's probably where all his cash is going. I just got a call from the media team. Supposedly Gilly sent them something. It's bad news. He's like a week away from being essentially bankrupt. I'm not seeing any payroll taxes.

I need to be in this low spot.

I did not know that things were this bad. I don't know what's happening here and I didn't know for the rest of this episode.

I feel like we do so good with the labor side. We know how to do the fire business, we know how to mow the grass, we know how to lay sod, whatever it is. Hey, can we afford this? Can we get this? When it comes to the administration of the business, we just need help with that.

The only thing we should focus on then is this constraint of capital.

What are we doing wrong? Not paying attention to the future? We could potentially get us in a bad spot that we don't want to be at.

Once you do get caught, it can be a big problem.

If it can't be healthy now, it's not going to be healthy at a million. And if that means you chewing me out for a week, I'm ready.

Prove to me that you raise all your prices.

All right.

We are in Shreveport, Louisiana, and if you don't know where that is, don't worry. You're not missing out on much. But we're here to help Gilly with his business. He's doing over 500,000 annual revenue and I have some concerns based on the profit and loss statement that he has sent over to us prior to coming. Alright, so I'm looking the p L from Gilly and I have a couple concerns. I don't think he knows just how risky he's running the business right now in terms of debt. Like, I wasn't thinking it was this dire, like, this bad, as well as just low profit margins. Like how tight are we right now in the business?

Right now we're pretty tight.

He wants to know about how to grow and expand and get past 500,000 because he seems to have stalled out there the past couple years. So let's see if we can help him get over this hump and continue to grow the business. Use the right lane to merge onto.

I20 east toward the ground.

Dude, those are nice trucks.

I don't think my locations have ever seen a truck that nice drive in, let alone be used for lawn care.

How's it going, dude?

Nice place you got here.

Thanks, man.

Gili Gilly. Nice to meet you.

This is my brother.

Good to meet you, man. What's your name? T.J. michael. Michael. Good name.

Let's go call him Miguel.

Miguel. Okay, cool. Well, did you just move in this place then, man?

Yeah, we've been here, what, three months, maybe four. Yeah, man.

It's like an acre.

It's about 0.8. So, yeah, a little over three quarters.

Do you buy or is renting?

We're renting out and possibly buying it.

Sweet. Good feeling.

Sell it. So, yeah, man, we're excited to be. A lot more space and then a lot more space.

Yeah, Gilly's new trucks. They look awesome. I'm not gonna lie. The really nice shop space, also very cool. But these things could be keeping him from growing his business. But before I jump to conclusions, I want to take a look around and see what else is lying around the shop. Dude, that's a tank. Is it aluminum?

No, it's solid.

Solid steel. Dude, the thing's huge.

Yeah.

Let's go. Do you focus a little bit more on projects when it gets this hot.

Then we do, you know, a lot of, you know, like, newer projects. We've been doing a lot of that lately, prayfully. You know, we get this with this contractor trying to get some more work, you know, to do some stuff. More stuff like that. Yeah, that's kind of what we like, you know, installs. Yeah.

Yeah.

I always feel like that's where we can put our. Put our passion and just put our vision, you know, and make something happen, you know, with that.

Yeah. So that's cool, man. That's cool.

Yeah.

So how big is this building?

So this is.

Oh, man.

Is it a 30 by 40?

30 by 40?

Yeah, a little 30 by 40.

That's cool, man. What's the rent cost here?

900.

900. Oh, dude. Let's go. That's awesome. Good for you.

So, yeah, man, originally it was going to be $1,400.

Yeah.

And we talked to the guy. I was like, man, you know, can you give us a deal? And we went back and forth at $900, which I think I just couldn't pass up.

No, dude, that's amazing. What does he want for it to buy?

So he wants 130.

Oh, man.

I'm thinking it's. I talked to a friend that's in the real estate, and he's thinking it's a really good deal because he actually bought it for 125, like, six or eight years ago. So I think it would be a good you know, I don't know what you think.

I think that's a good deal. But we're coming from a spot where this would be at least 900, 800, 900,000.

Oh, wow.

Yeah. No, this is where we're at. This is impossible to find. That's not bad though, man.

So did you and your brother get started on doing this, like, four years ago, then?

No, actually, we've been. This is our seventh year.

Seventh. Wow.

So we started as a. As a side hustle, you know, Our current job, we run the oil and gas. And oil and gas kind of went down, but we need something just to make money. We really didn't even start as a business. Just we need to make money, you know, so we got us a mower, we got us push forward, you know, and started doing that. And then, man, it became a passion, man. It became like, man, we want to do this, you know? And then it was like four years ago that we were like, man, we can make a living off of this.

So the past four years is really when you've been full time on it. So, like, I know this year it's like 550ish. Last year was like 480ish. What were the two years prior to that?

150 to 200.

And it was you and your brother together the whole time?

Yeah.

Okay, cool. Good, good, good.

You got office space in here?

Yeah, yeah, so we got a little office space.

Cool. Nice place to crash and get stuff done. Oh, gee, let's go. She got AC and everything? Yeah. This is where the hideout is. Okay, so Gilly did get a pretty good deal on the shop space. $900 per month for something like this is unheard of. And honestly, just too good to pass up. And honestly, in my market, a property like this, you're literally gonna pay three to four times as much. But if Gilly wants to purchase this property down the road for further expansion, he's going to need cash in the bank. I noticed on the board there was 2,550 for fixed costs. And that said trucks. I'm assuming most of this. Is this already mostly paid off in terms of inside cool?

Well, no, we have one that's not paid off. One of these.

Okay.

And I think we owe like 2000 a little bit. That's 3000.

And so those are the three trucks for the 2500. Those are the payments on those.

Well, we have two trucks. They're paying.

Okay, got it. And then the third one is the paid off. Yeah, sweet. Got it.

Yeah, that and then we paying for a mower. We pay like $200 a month on this mower.

Gotcha. So you got the two trucks basically have the payments. That's $2,500 a month. Those must be pretty low interest then, right?

Yeah, they're like 6%.

Okay. That's not too bad.

You know, we got to the point where, you know, we had to try to get newer trucks.

And as far as the overhead goes, I don't think the shop is really a big concern to me. It's not breaking the bank. It's a great deal. But when I see two really brand new, nice trucks, I think loans potentially might be wrapped up in debt in the trucks and the equipment. I also need to address some concerns based on the profit and loss statement that was sent to us prior to going out to Louisiana. All right, so I'm looking the P and L from Gilly, and I have a couple concerns. The main thing is the amount of interest expense that you actually see on a P and L is not the entire payment every month because the principal is on the balance sheet. And so when I see that much interest being spent every month, I'm guessing He probably has 80 to $100,000 worth of debt. And his payments every month are probably three to four times that interest payment per month. That. That's probably where all the cash is going. So even though it looks like there's profit on the bottom line of this P and L, all that cash is probably just going to debt payments. I'm also a little bit concerned because I'm not seeing any payroll taxes and other workers comp. And associated with running W2s. He could be running either cash to the table or 1099, which the vast majority of people should not be running 1099. It is a short term strategy, and until you get caught, it's all fine and good. But once you do get caught, it can be big problems. And if you're trying to grow sustainably in the future, you don't want to build your business on something that could just all of a sudden explode on your P and L. When it had contract labor, are you taking a wage out of that or are you just taking from the bottom line right now?

I'm taking a wage.

Okay, you are on top. Okay, good, Good. On the P and L, I notice it was contract labor. Are you doing just 1099s for all the guys right now? And then you and your brother are 1099s? Or how are you breaking that up?

They're W2s, 1099 employee and the rest of the guys are W2s. And for us it is considered as distributions.

Yeah, okay, got it. Okay, cool. But you're just throwing that all underneath. Contract, label.

Yeah.

Okay, great. Honestly, I'm glad I was wrong and I'm glad Gilly is moving towards paying all of his employees as W2 employees. But it does sound like these debt payments could be holding the business back.

Because right now I feel like our struggle is just to be growing. You know, we were thinking we were going to grow pretty good and we're right there with next year. Right when we were last year.

What do you think the main bottleneck? Is it just like you being able to get to the sales? Is it like the management of the customer side? Like, where's that bottleneck happening? Because you obviously the first couple years grew quite quickly.

Yeah.

So like this year and last year pretty much the same. Do you kind of feel, you know what, that. What's causing that?

I feel like it's. Some of it is on my part too that I'm missing out on work. You know, I'm not really, really pushing to grow. And like, just to be honest, like, we don't do no advertisement, so everything that's come has been my word of mouth.

Do you feel like you have enough money set like aside for marketing and like expansion, or is it a matter of like it's a little bit tight and you kind of feel like you need to get some more profit before growing? Like, where is that from a capital perspective?

I think it's a little bit tight.

Yeah.

I think we needed. We need to save up a little bit more in order for us to grow.

Right. What's impressive that you guys are doing honestly, like five, five fifty with just five guys From a revenue per team member perspective, it's actually really, really strong. So that's when. That's when I look at the P and L and I take number of employees versus revenue, it's super high. Especially in this market where I'm like, what's your base pay? Like what's your kind of average hourly.

$16 hour dollars an hour to, you know, 20, 25.

Okay. And then for what do you get? What are you charging customers about per hour?

$75 per man hour.

That's great. Yeah. See those numbers look really good to me. So when I know that there is, you know, some sort of like just like tightness in terms of finances, I know it's somewhere in between there and a lot of times when you want to grow and you're not. A lot of times, whether it be advertising, making a better website, whatever it is, it just does come out of capital and, like, the ability to be like, okay, I have the ability to spend on this without putting the business in financial jeopardy. So it's like, how do we, like, free up cash in the business? Because a lot of times it's sitting there. And even the fact that, like, right now, technically, if you just waited a few years till the trucks were paid off, well, immediately $2,500 a month just became available. A lot of businesses at this size feel stuck. They're not making a lot of profit. But there's one thing I want to go over with Gilly, because I truly believe you can do this one thing in your business and raise profit margins without having to deploy a whole bunch of capital that you might not have.

And I kind of seen, I think, one of your previous videos that you were basically just raised everybody's price, and we haven't done that. Sometimes you get attached. Like, if you were to do it, if you were to go in there and raise prices, like, you don't have no attachment to anything.

Yeah.

It's like, man, I don't care. We're raising $5.

I'm interested to know what Gilly is charging his customers per hour. His team looks solid. He has all the resources and the assets in terms of trucks and equipment to be successful. We just need to find a way to make him more profit so he can grow the business.

This $75 per man hours started this year. Before it was 65.

Okay. Did you. When you went from 65 to 75, did you raise prices then or is. Okay, got it. So, like, that's new customers coming in.

Yeah. The new ones are at 75.

Gotcha. And how many mowing customers do you have right now in total, do you think?

We have about 80, 82 residential.

Okay.

And then we have 15 commercial one.

The challenging, too, thing is when you want to raise prices and there is the chance of losing anyone, it's like that tension of, I want to raise price to make more profit, but that's coming at the cost, potentially, of growing more. And so when you're in a spot where you feel like, man, we're just, like, kind of stalling out. Most people won't raise their prices because they're like, well, that's gonna be what I need to kind of grow is keeping the customers. A lot of times, though, when you raise the prices, the profitability of doing so is what allows you to grow. Cause now you have the money for the advertising for other things that kind of then unlock further growth. It's time to create a plan around stacking cash, becoming more profitable, so we can shift our focus into growth and getting more customers next year.

When I look at a company that wants to grow, there's several different things that'll be the constraints. And either it's gonna be leads, it's gonna be capital, it's gonna be labor or leadership, right? So any one of those, if there's a constraint, they'll stop growth. And so what you can come up to is like, hey, I'm growing. I'm growing. All of a sudden, you stop growing. And typically it's one of those four things, right. At three or four leads a month, what you're probably hitting is the fact that your churn, like how many customers you just kind of regularly lose is equaling how many people you're just gaining every single week or month. Right. So out of those, say three or four, you're probably adding two or three to the books. But what's also happening is out of your hundred customers, you're probably losing two or three. So what's happening is now basically how many customers you're losing every week or month is kind of equaling how many you're gaining. And so you'll basically kind of stall out there unless more leads are put in.

I see. I see what you're saying.

Right. And so, like, that's typically the lead problem. Then the next problem, though, is, like, from a capital perspective, if you don't have the money to go spend on the ads, you'll never be able to increase the leads. And then even if you didn't get more leads, if you're constrained by capital, you won't be able to go hire more people. Because then it's like, still a matter of, like, well, I can't afford another truck. I can't get more equipment. Like, there's just. No, I can't keep continuing to grow. Like, ultimately, what do you want the business to do? Like, is there a certain size that you're going for? Is there a certain revenue? Like, there's a certain number of employees? Like, what's the overall goal is? That had not really been established yet.

It hasn't. I mean, I know we know what we want. You know, we want. We say we want a big business. Right?

Right.

But that's not really a goal, you know, like, in my opinion, like, okay, why do I want A big business, you know, so that's been a factor to finding, like, what is a real why.

Right.

When I have trouble with that, you.

Know, it seems that Gilly and Tomas don't really have a clear vision of where they want the business to go and where they want it to be in the future. This confusion can make it difficult if you're trying to grow, especially when you have partners involved. And everyone's definition of success is different. Ultimately, if you can't figure out, okay, like, why does the business exist? Then in order to achieve that goal, how big does the business need to get? Because that has to be established. Because everything else stems from that. Whether or not you go full time in the sales side, or at least that's the goal. Whether or not we need to expand, whether or not we need to buy the shop, all of that kind of trickles down from, like, why does the business exist? And then from there it's like, okay, well, how big of a business is that? Because if that's a $600,000 business that you just optimize for profit, it's less headache from a managerial standpoint. You still do get out in the field a little bit, etc. That's a total different conversation than, okay, we're going for 1.5. That's a different structure. Right. And it's a whole different direction you take the business.

Yeah.

So like, getting clear on that is probably the most important thing.

Yeah.

Defining what success looks like for AUX Services is the first step. Then we can work backwards and assign numbers and numerical data to each goal, moving the business forward.

And I even have like a statement that we wrote.

Yeah, I saw that.

You know, we had a vision that we will be a kingdom. That business where hundreds of people can have an exciting and well paying job, where we were able to advance the kingdom with our offering service and leadership in this company. This will be a great place to create great leaders. We go about one thing is this committed to excellence. We remind ourselves of that every day. Because that's a big word in all things. Whether how we treat your employees, how we treat our customers, how our equipment looks, just how we dress.

I think like your why is probably more clearly defined than you think. Like that's a very clear mission statement. The part that I feel is like somewhat blurry is how we're going to get there. You know, what we do is, you know, landscaping, lawn care, we're going to hire more people, whatever. Like how there needs to be a definitive numbers and like, what are the Benchmarks for that to happen. So for example, in order to serve hundreds of people. Okay, great. What does that look like? Is that hundreds of customers? Like, is that a number of recurring customers and then a well paying job where we advance the kingdom with our offerings. Okay, what, what's the definition of that from like a business? What's the numbers? Like how many employees are we going to affect if the benchmark is to create great leaders? Okay, what's the definition of a great leader? And then how do I measure that? Right? Is it people that have worked here for two plus years and then go get another job? Is it people here that are earning more than a certain dollar amount because you feel like that person now is they are achieving excellence in wages? The business doesn't care. Like when you look at a spreadsheet like this, it just numbers. We have to somehow tie the numbers in with that. Because in 10 years the question is like, has this been achieved? Well, yes, kind of. I don't know, sort of. We grew a little bit. But when it's like we tie in numbers to it. Like in order for me to have this, okay, what metrics do I need to hit? And when you create that clear vision, then it just, you work everything backwards. Okay, great. Well, how many leads do I need every month to hit this? Right? Because if right now we're hitting, we're getting three to four leads a week and we're basically stalling out where our recurring new customers coming in is equaling how many are leaving every week. Okay, well great. If I move that to 12 or 15 leads a week, well all of a sudden that is going to four extra business just until you actually hit the next plateau.

The thing is though, once you change from 3 to 4 leads a week to 10 to 12, the whole dynamic of the business has changed because you will have to change operationally what you're doing that, that, you know, 12, 13, 14 leads a week, that becoming. Okay, you're gonna basically be doing that probably three or four hours a day. You're probably gonna be, you know, drawing up those estimates, doing a lot more paperwork, sending out sales proposals, meeting with people a lot more. And that's when like the whole hierarchy and like the structure of the business has to change then. Right? But, but what a lot of people do is they'll come with the car, they'll put the cart before the horse and they're like, oh, I need to change like the structure of the business. And like I need to be full time sales. One's like, no no, no. You got to fix the leads problem because it's like capital leads, labor, and then leadership. Right now, the main thing we need to focus on is capital or liquidity, get more cash in the bank to prevent us from going bankrupt. But the next thing is get more customers. These are the bottlenecks that you're gonna hit as you begin to grow your business. I know increasing leads is the ultimate fix in terms of growth.

Yeah.

From a capital perspective, like, how tight are we right now in the business?

Oh, man. Right now we're pretty tight.

Yeah.

I mean, we have enough to pay. To pay our bills, but we don't. Don't have that money to just, you know, spend a couple hundred dollars, and.

We'Re gonna spend marketing. Yeah. Got it. Okay, cool. I can tell things are becoming a little uncomfortable right now. Gilly is starting to sort of clam up just thinking about how tight the cash in the business is right now. And I know this is putting massive pressure on the business. It's not comfortable to talk about this, but there is no extra cash to throw into marketing or advertising, which means we can't attract new customers and new leads to the business.

I feel like, you know, we. We thank God we have enough to. To. To pay labor, pay the bills and stuff, but. But when it came to having capital set aside to where we feel comfortable we can use for. For advertisement and growing the business, that's where we were struggling. So.

For the camera, Deep.

Got some bad news.

What's up, dude?

Feel.

I sent something over. You want to take a look at it?

We're, like, almost done with the edit here, but this time, change these things. What do you send over is his most recent piano. We got the last one Piano. We got that. Yeah. But this is, like, year to date. The most recent one. The balance sheet or the. The Pino Mountain. Yeah.

Yeah.

Nice.

He's only got $7,000 in the bank. I know. After watching the edit, I was like, that's a little bit more intense than we thought. We thought it was like 40,000 by the end of 2022. Yeah.

Kind of stinks because the whole second half of that video had changed. Just like, I wasn't thinking it was this dire, like, this bad. I know, I know. Yeah, it really kind of changes the whole circle. Well. Cause should we even put the video up? Because I'm pretty chill with him in terms of, like, what should be happening in reality. Like, it's not like he has a few months. Like, it needs to have. Like, he needs to raise his prices immediately. It's not like I just don't have. I didn't have any urgency on it. Compared to, like, there's $7,000 in the bank. He's, like, a week away from being. Since she bankrupt.

Yeah.

Like, at least in Sullivan, he has $100,000 worth of debt.

That debt's not going anywhere. Okay, well, instead of scrapping the episode, why don't we just. I'll just tell the audience, like, hey, I don't know what's happening here. And I didn't know for the rest of this episode. Yeah, yeah, that would work. I know. Scary. Not only had the.

All right, so keep in mind the rest of this episode as you're watching. I did not know that things were this bad when it came to how much money was in the bank account. I didn't know that there's only $7,000. And if I knew that, I would be way more dramatic and probably just forceful with what I'm telling Gilly because the situation is very, very, very, very bad. And so just keep in mind as we watch the rest of the episode. I did not know that piece of information. While shooting the episode.

I want to make sure that when I leave, Gilly has a very clear plan of what the future of the business looks like and visualize exactly the layout and the hierarchy of what that company's going to look like in terms of him and his brother leading the business. This will create a foundation of growth to build the business on into the future. So, like we say, okay, in four years. So that would be what, 2027. Right. Our goal is, you know, in terms of revenue. Let's put some metrics to this. Right? So revenue wise, if we want to be hitting. Let's just call it 1.2 million, in order to hit that, if you. If you stayed as efficient as you currently are, where you're basically doing about 110,000 in revenue per employee, you would probably need about 11 guys. You're probably not going to remain that efficient as you scale because, like, you and your brother out there doing the work and just crushing it. And that's why, like, right now, you're tied to it so much in terms of being out in the field, because you guys are the moneymakers. Like, you guys are the ones that just make it so efficient that even though it might be, it seems, you know, tough financially, you're making it work. And it really is coming down to the fact you have two owners out in the field. And as soon as that starts to break down. That's where systems are so important. Because when you get new employees, now all of a sudden you both can't be with them. And that's when it's much more difficult. So let's just say we have 15 employees. What's the structure of the business going to look like? So over here, we probably have more of a CEO role. In terms of Gilly, how you want to look at this is like, you bring in the revenue, he, like, fulfills on. On the work, right? And then he's going to have likely four to five crews underneath him. And he's going to be the one that sort of leaves the crews. He has to train the crews. He is fully responsible for getting that work done. And then what happens is you stop getting so involved with the work. You start having customers that you've never been to their property. You start having it where you literally don't. They don't even to you, it is a number, like literally number 568. It is just someone that you've seen on the schedule, and you'll start acting more like a CEO instead of, oh, man, like, Barbara's been with us for like three years, you know, and that, that pressure of like, I can't raise prices, et cetera, kind of gets extinguished because now you're simply just looking at the numbers.

Right?

Right now we start. Keep working all the stuff backwards. Okay, well, if I'm going to have four crews, do I need more trucks? Do I need more equipment? This is now when capital becomes the constraint. Right. Gilly has been trying to get more customers and fix the leads part of the business. When reality, he needs to focus on the capital or the liquidity of the business first. Hence only $7,000 in the bank account. All right, so I'm drawing out four Gilly on the piece of paper I call a 4L framework. Once aux services does continue to grow and get more leads, therefore more customers, they're going to need more employees, they're gonna need more labor on the 4L framework in order to be able to continue scaling up and hiring and training and developing their team. And then as that happens, you get more employees. Guess what? You've got to develop leadership. And that's where Tomas and Gilly have to have very clear responsibilities on the org chart of what need to occur. And as you begin to grow your business, this framework continues to go. Because as you continue to scale up the organization, you need capital and liquidity again, and you need more customers. And this is a process that keeps going on and on. And furthermore, we're talking a lot about the 4L framework at conference Landscape summit coming up in just a couple weeks. You'll definitely want to be there. Do not miss out. We're going to be going over this in depth and talking about each of these bottlenecks that you will experience as you grow your business.

So if you start just working this backwards, like, okay, this is the goal. Four years. Great. In order for this to happen, what needs to take place? Well, first off, I need four crews. Okay. So I'm gonna have to eventually buy one truck. Okay. I'm probably have to buy one or two more mowers in four years because these ones are going to go down. I'm gonna need replacements, etc. So what is the capital requirements going to be for those, you know, more assets essentially? Right. Then it's a matter of like, well, how do I actually make these guys busy? It's going to come down to leads. Right. So we've addressed. Okay, this is our leadership. I think that probably is not a problem at all based upon the hour I've been here. I feel you're a really strong executive and I feel like Tomas is solid in the field and really good with the operation side. So I don't think leadership is ever going to be your bottleneck in terms of the. In the short term, you have a very clear vision. The why of the business, like the center point. Super solid. The part that we're struggling at right now is what does that actually quantifiably look like? And then how it's going to happen is what we're drawing up right now. Then what's the next constraint? Well, we got to go get the leads first because I'm not going to go hire labor and fix this constraint until I go get the leads. Well, why can't we go get leads right now? What is the solution to getting those leads is probably advertising, creating a better website, figuring out Facebook, figuring out Google reviews, ranking well on Google. Those are all probably the strategies. Well, why can't we do that? Right now is probably capital. Right? There is a stress in the business when it comes to capital and that's the thing that needs to be fixed.

This is the problem is like a lot of times when we hit plateaus, like, well, I just don't know why, why aren't we growing? It's like, these are the four problems. Which one is it? I don't think it's leadership. I think you guys are super solid. I think you grow to a 2, $3 million business without changing much of your dynamic. Like, you guys have a very solid CEO and CEO role. Like, essentially, like, so for myself, that was Liz, who's my CEO, and then I was a CEO, like, very strong dynamic. You can grow on top of that, that relationship. You guys have the same thing. I don't think leadership is the problem. To grow to this size. If you started growing to like 5, 6 million, maybe you need to bring in different leadership. In order to get these leads, though, we need the capital. And that's the part that I think is holding you back right now, is you simply are locked up by the fact that you know exactly what you need, but you don't have the money to go make it happen. Right. And so it's like, okay, the only thing we should focus on then is this constraint of capital. Focusing on anything else is a waste of time because if we figured this out, it will fix the lead problem. And if we figure out the lead problem, we will then have the work to go hire people. So figuring out how to hire people right now is a lost cause. It's a waste of time because we don't have the leads for them to go do the work. And it's not even worth trying to figure out leads right now because we don't have the capital to do so. Right. So that's where it's like a matter of, okay, how do we then just basically make the thing more profitable? And that's where I think it's a matter of, like, potentially taking the next six to 12 months. And, like, we're only going to focus on this, and that is stacking money aside so that we can then go spend on getting more leads. And that's like our only focus.

So Mike drew it out on paper, and he made it, made it look a lot simpler than we thought. I felt like when it's drawn on paper and I'm able to see it, get a better vision of it, and makes it easier to move forward.

And I can guarantee if someone's willing to pay 70 and they're happy with you, they're not going to switch for 80, it's 10 bucks.

But it's tough. Like.

When I first raised, we were four and a half years in the business. I had never seen a dollar of profit until taken out of the business. And the fifth year I raised my prices that fifth year, I made more money than I had in the first five years combined because I was, like, right around zero. Always very struggling with working capital. Never could take money out, even though we were growing. It was like, could never take money out of the business. Raise the prices one time from that fifth year. Just literally more profit in that one year than everything else combined.

I know that if you only have 5, 10, 15,000 a bank, it locks you up completely. It debilitates you from thinking about any of this stuff because you're simply like, I must hit payroll in order to hit payroll. I must make money in order to make money. I must go out and mow lawns. And so that's the cycle we're in right now.

If you had $50,000 in cash right now that you know you didn't need for the business to operate, you would be looking at this very differently. We would be xing this off and like, okay, great, let's figure out leads. Let's figure out how we should advertise. Let's go through three different campaigns. Let's change the website. Like I think the website changed and just done redone from an SEO perspective would alone double your leads. The thing is this. You're worried about getting more of leads when we need to figure out capital, right? 8, 8, 10 customers that we lose can all be fixed if we get more leads. But we aren't going to even think about leads until we figure out and fix the capital problem, which is the fact that we need to make more profit.

Okay, well, here's the deal. I think we can get an extra $2,500 a month by raising prices. I will put a guarantee that in 2025, or, sorry, 20, 2024, so next year you'll do $800,000 revenue. And I will do that guarantee if you prove to me that you raise all your prices. If you raise your prices on your contracts and then at least the 80 of the customers, like the residential ones, I'll guarantee 800,000 in annual revenue next year if Lawn Care Web Design builds your site, because I think that alone will get you 800,000. I think you guys do a great job. I can tell just by Wayne, you and your brother, you very much care about the customer and you care about your service. I'm not even concerned about attrition, like losing customers and things like that. You guys are always gonna have a very, very high standard of, like, treating the customer right. And that's why I also think when you raise prices, you're not gonna lose customers. You guys care so much that we've.

We've never had a plan as far as. Or somebody tell us, like, look, just do this and then you do this and then you do. This is what you do. Yeah, we've always been hands on working. Yeah. And so our go to is always work, work, work.

Right.

And we have to look at it from a different perspective now because we have to step back and we have to obviously work but in a different way.

I'll basically give you all your money back in 2025 from Lawn Care Web Design if you don't hit 800,000 in annual revenue. Because I know it'll happen, I guarantee it. And this is the bottom line. The cost of that, of the website's, you know, 399.

Right.

Well we just paid for all of that right here and more. And that other money is going to go in your bank account. So you don't feel as much pressure now when it comes to the next step. Their next constraint that they're going to hit, it's leads and that's probably going to be resolved by having a much better looking website and ranking website. And so I really believe that the team@lawn careweb design.com is going to be able to help them overcome that issue and within the next 6 to 12 months allow them to get more leads more often from their website. Next year when I come back, it's, this is another huge, huge issue as finding employees, training employees and then you falling into these roles because 800,000, you're not going to be out in the field, you just will not be able to. Right. I was talking with him like the big transition too is like once the owners are not working in the field, that's when the team really has to stand on their own two feet. Right. Because like until then you can kind of compensate for a lack of good team by just having good owners out, just hustling all the time. Right. Because this stress right now is keeping the field. I know exactly what it's like. Like when we hit about 800,000 is when I started feeling this because I had just got someone in the office. I had is a year four there and it was like, dude, there's no money. I can't, I can't do anything. And then that was like I'm out in the field working 34 hours a week now I've got to come in the office and do estimates and everything else and you're working 70, 80 hours a week and there's no money and that's stressful.

Dude, he set out a plan, things that we need to focus on and we're going to move forward with this plan starting today and I know that this is going to get us to come out of this, out of this problem that we're having and.

Get us to the next, the next step.

So I look at this as two parts. It's a two year thing, right? Number one, we've got to fix capital. Number two, we've got to get a website that actually produces enough leads for us to grow. We've got to hit $800,000 next year and we'll do it profitably because we raised prices. Then I will come back next year and we will have to figure this out. There's a whole different beast. The structure, the layout of the shop, how the guys parked, all of that stuff has to be redone and, and Tomas is the big piece of this next unlock. Because the unlock right now Your experience from 500,000 to 800, 900,000 is going to be you, sales, marketing, fixing the capital and leads is you. This part comes down a lot on Tomas. A lot. Because he's got to now become a leader instead of someone who just works really hard because right now he's leading by example. Work really hard on the field. That's a different dynamic. When you get 12, 13, 14 guys underneath you and you've got to now manage more by like you are a leader, not just a worker out in the field with them, right? It changes from player, coach, you're out in the field working with them to like now you are the head coach, you stay on the sidelines and you direct without getting on the field. It's a different dynamic. How much is in the bank right now that would drive the point home. I wish Gilly, Tomas and the team at AUX Services all the best. I truly believe they have a solid foundation of quality, quality and excellence. And if they can take that same mentality and apply it to the business principles within their company and focus on stacking cash, getting profitable and raising prices that over the next six to 12 months they can absolutely turn the business around. Not only making it more profitable, but growing into the future using the frameworks of liquidity, leads, labor and leadership can absolutely help you identify the problems inside of your business. And furthermore, we're going to talk about this a lot at Landscape Summit. It's the perfect place to get around other operators, other business owners that are experiencing the exact same bottlenecks and have strategies to overcome them. Make sure you go to mikeandys.com summit and sign up. It's just a few weeks away and look forward to seeing you there.

Yay or nay.