Inside The Mind of Home Service Millionaires

In this video, I'm talking to over 1,000 home service business owners inside of the HomeWorks community. This is usually just reserved for inside of HomeWorks membership. However, I want to share with you what we do on a weekly basis inside of the mastermind. And there's some great questions today about how to hire your team and do training using videos. We also talk about how to build a culture that is not just based on compliance, but is also built on having goals oriented with your employees and having great one-on-one meetings. So without any further delay, let's jump into this. And if you'd like to be part of this mastermind, feel free to join at home.works.

This one's from Katura Roland, Supreme Green. We are fertilization and weed control company. When we first started years ago, the majority of our service was fertilizing with 7 spray cycles per year. More of our business is shifting to just weed control on non-grass properties. This is causing huge scheduling imbalance. The workload doubles or even triples during the odd number spray cycles. It's almost to the point that we need another employee just for the odd number cycles, but that doesn't seem realistic for everyone to only work 6 on and 6 weeks off all year. What do you suggest? So first off, I would challenge this assumption because every time I have thought this, I've been wrong. And so this is a limiting belief that I have had in the past, and that is If I have a crazy work schedule, someone— most people don't want to work it. And I would agree with you that most people don't, but there are a lot of people out there, especially right now with the labor market the way it is, depending on your market. But like, for most of us, if you put up a job ad that says, hey, you're working 2 months of the year, you're working 4 months, you're working 1 week off, 1 week off, 1 week on, 1 week off, there are people that it works perfect for their schedule. Now, most of us as business owners, we like to offer full-time jobs and we think that everyone wants a full-time job when the reality is people's life situations sometimes It would be perfect to have 6 weeks on, 6 weeks off. Like, it would be perfect for them potentially. And so I would put, first off, I would, before you change the business model, I would just challenge that assumption and put a job hiring, an ad up that says you're gonna work 6 weeks on, 6 weeks off all year round. And you're gonna work crazy amounts of hours during the 6 weeks on. And some people are gonna be fine with that. You might put that person on salary too, and they're okay with that because they are like, hey, I wanna work really hard and then I'm gonna go to a different state where my family's at, and that's where I'm gonna hang out with them, and I'll come back and I'll work here, and I can make more money here and then go to a lower cost living state and stay back with my family. That might be something that someone would do. So I would first challenge the assumption, because I'm— I say that mostly not at you, uh, Keturah, but every time I have ever thought I need to change my business because the scheduling of the team, every single time I have just posted a job ad that that states here's the parameters of this job, and it's weird, there are people that want that. In fact, you are now competing in a market where no one else is. Like, most other companies are not offering 6 weeks on, 6 weeks off year round. They're offering 8 months, 40 hours a week for 8 months of the year, for example. So you're actually— even though you're, uh, the amount of people you're going after might be way smaller, the amount of people looking for type of schedule might be smaller, the amount of businesses looking for that schedule also lower. So I would first challenge the assumption, and secondly, I would look very hard at scheduling to see, can we move these slightly in left and right directions? And even, even if we had to give people discounts, or even if we had to sub out certain of these cycles to be able to get certain parts that might not be as integral or like important. I don't know what kind of sprays you're putting down, but like you have spraying of certain chemicals. Maybe some of those you sub out just so you don't have to increase the amount of capacity of the business to the highest level. Because if you could say, hey, I only need like for 3 weeks, 3 times a year for 3 weeks, I need like tons, like double the capacity. That's when you don't want to go out and buy trucks, get equipment, hire people for the highest period of the year. You would rather have it where you sub out those periods. And I would also say, I think you could schedule it in a way where this is still possible by moving people out a week, moving people back a week, and trying to spread this demand out as much as possible. Or even more importantly, I would move your 7 spray cycles to accommodate the 4 times when you know you're going to be spraying the weed control. Again, I don't know your market. I don't know. I know it just— this was always a limiting belief for me around hiring. And then also limiting belief around the fact that I thought all these like when we did treatments back in the day, I always believe these treatments have to be done this week. When it's like, look, if I can take other jobs and reduce budget hours of other services and then move the cycles left and right, i.e., a week before, a week after, and then make sure that during those times I have left budget hours of other work. So basically what you have here is you have multiple budget hour capacities. And so happens that this one's way above budget hour capacity. And so I would take away from the other areas of the business during those weeks, like for example, like there's no installs happening that week. I think some of those things you might have already done. So I would first go to the lowest hanging fruit, which is just change your job ad and you might be surprised. Real Kelly from Military Lawn Cuts. Number 1, how do you mentally navigate the guilt of stepping away from day-to-day operations to focus on architect mode and personal growth? I struggle with the first one in, last one out mentality, and I'm looking for the right thought process to handle the concern of what my team might think when I'm not physically present in the office each day. Yeah, so I abide by the first one, first out mentality when I'm in growth mode. If I'm in profit mode and once the location is stable and there's profit sharing, that's when I feel like I can step out. That's just me personally. I'm not saying— I still struggle with this to some degree, but I also know that like I work on the weekends, I work at night, like I work all the time. And when they leave, they're usually turning it off a little bit more. And so That's how I justified it at first, 'cause I just had to like make sense of the fact that I know I'm working way more hours later and like there's another shift that happens. That was how I first did it, 'cause like I struggle with this too. And then now it's a matter of creating incentives to where it is in their best interest to make sure that the business is taken care of and they start to see the benefit of me stepping away. The best ideas, like literally last week, a huge like promotion and like change in the team structure was when I was away. And that's when I have the most time to focus on like rebuilding systems, um, talking with AI, figuring out how things need to be changed, getting— there's something about flying too that just like you lock— you're locked away in this tube 30,000 feet above and you just can think about more broad things. Them having an understanding as to why that helps the business, but also having a vested interest with profit sharing or their comp plan being tied to the vested interest of the business is a big win. Number 2, I took your feedback on last week's mastermind and concluded that leadership is our biggest constraint. We have 4 new late managers that are in either different roles or have different team members, or have team members that report to them now for the first time. What are some tactical ways to grow and develop my team's leadership? I brought them to a leadership conference this offseason with Sam G and Dan Ralphs a few months back. I have— I am having each listen to the Audible book How to Win Friends and Influence People. What else would you— would give us the best leadership growth results. Yeah, like, I'm a big fan of, uh, Jocko Willink's book, uh, Leadership Training and Tactics. The best leadership book that I've ever read that is super tangible. I will also say nothing beats alignment of goals when it comes to management, by far. And so if you don't know what each of their goals are and you don't know how them winning in the business aligns with that, that's where I would start. Um, I'll have a video coming out on this in June, um, about how I do my one-on-ones with managers. How I make sure that we have a goals-oriented structure instead of a compliance-oriented structure, because compliance and correction is the fastest way to be able to get done what you want done in the business. And that's why most of us will operate through checklists, SOPs, and those things are important. But if you have compliance and correction in your culture without having goals being aligned, then you have high churn at the management level. And so there's a video I have coming out. Um, in June when I'm starting to talk more about my business and how I do my stuff. And this is one of the most important things I think once you have mid-level managers is yes, you need compliance. Yes, you need correction. Yes, you need SOPs and standards and checklists and audits and quality control. But if you just have those things without goal alignment, that's when you have a lot of churn. It's expressly shown at the leadership level because technicians sometimes will actually thrive or adopt or really enjoy having a structure of compliance because they like structure. They like do these things, do these checklists, follow this script, do these things, it gives safety to them. As leaders, if they're A talent, they like more autonomy. And so just telling them what to do and just telling them if you don't do this, you get in trouble, if you do this, you get rewarded, just that alone is enough. I have found it most beneficial to have long-tenured leadership. And in order to have long-tenured leadership, I need to ensure that I know what their goals are and then that the goals of the business align. And that's usually gonna be through compensation, but it also could be things like time off. Like some people, Time off is way more important to them. Um, flexibility, way more important to them. Have a company truck, like way more important to them. So I need to know what their goals are. And then I just align the goals of the business with theirs. I just consistently seen the people that build the biggest businesses have low churn at the leadership level. And they're willing to work with their leaders to make sure that their leaders' goals are aligned with the, uh, the businesses and the goals of the business are aligned with that of their leaders. And I've been very blessed in that category in terms of like, leadership, a tenor, uh, and not having churn at that level.

All right, so if you're wondering how you can be part of the mastermind, this is for all members of HomeWorks. So every single week or two, we will hop on a call, answer all questions from the members. And the reason we do this is because at HomeWorks, we actually guarantee you'll grow your business by at least 10% in revenue or profit in the first 12 months. And on average, that number is actually 38— over 38% of the amount that people grow their business in the first 12 months of joining the software. But the reason we do The Mastermind, and we had the Facebook group, and we do our onboarding sequence the way we do, and I'm on those calls, is because what we found is you can give all the features in the world, but if you don't use it, it's not going to impact the business. And so when we made the guarantee around growing your business by at least 10% in revenue or profit, we realized we'd have to give more coaching and training of using the tools. But also, when you grow really quickly, there's other constraints around leadership and labor and hiring and creating systems and operations. And so that's really what we try to cover on the mastermind and inside the group to be able to make sure that as someone grows, they don't actually completely reduce the business or go bankrupt. Just because a fast-growing business, even if it's profitable, can go bankrupt if things like accounts receivable aren't held in check, training your team isn't done right, you're not able to get— hire great employees. And so these are a lot of things that we cover inside the HomeWorks member mastermind. So if you want to join, that's how you'll get access to these calls.

Jeremy from Klein Lawn Care and Snowplowing. What are some good ways to show employees that you appreciate them and care? Should you be doing this differently with people that have been with you for long term versus new hires? Great question. I think for newer hires, one, one of the ways to show that you appreciate them and care— yes, there's the little things, and those things are important. If you're more of a gift-giving type of person and you, you, your love language is gift-giving, you're usually the type of person that is like, gonna go buy them ice creams and pizzas and do them at breakfast in the morning. And those things are good, don't get me wrong. They are 100% good. For some people, like, that just seems so weird to them. It's like, just show up and do your job. Everyone's different in terms of like how you give thanks and show appreciation is usually the way you like to be shown appreciation and given thanks. So just be careful with that, 'cause a lot of us are money motivated as entrepreneurs, or you're trying to get out of a bad situation, so you start a business. Because of that, the way that you show thanks to people is like, all right, I gotta give 'em more money, or I've gotta give 'em a bonus. Sometimes that's not actually their mo— motivation. And so understanding what their motivation is is really important. In my opinion, if you show them the right level of care and appreciation, I will also say a personalized, a personalized appreciation and care is always more impactful than broad strokes of appreciation. Giving money really fast is probably the most expensive way to be able to show appreciation. For example, if you should raise someone's pay by $2 an hour and they're working full-time, that's $4,000 a year. Now, this came really a reality to me when at my shop years ago, my first location. I remember there was a couple employees murmuring about something and the team members kind of stood up and they're like, "Hey, we know Mike cares because last Thanksgiving and every Thanksgiving, he buys us turkey, ham, pie, and apple cider." And in my mind, I was like, I'm always so like, worried and anxious about trying to like get higher hourly rates and like P4P and bonus and profit sharing and trying to give them a couple of dollars more per hour on base pay. That's thousands of dollars. And here's something that they were talking about that probably cost me $120 to $150 per employee. And so sometimes just taking dollars and cents you would otherwise deploy towards base pay or something and be like, okay, should we do dental? It's not going to cost you a lot. Insurance, health insurance, Yeah, yeah, I can't afford that yet. Okay, do a health stipend where it's like, hey, I'll cover your gym membership for up to $80 a month. You just gotta submit at the end of the quarter and we'll give you a refund. These are little things that like help you stand out and they'll make a bigger difference than extra $80 per month on your paycheck. I can guarantee you that. Then the next level is when you give them a gift, it's personalized 'cause you know what their goals are. That's like the ultimate. It's very difficult to do that as you scale, but if you have 5, 10, 15 people, knowing what their goals are and then directly trying to give appreciative care to them individually based upon the things that you know they like or the things they're going through is probably the highest impact. And then random acts of generosity have seemed to be work, like to show that you care so much is really valuable. Most recently for me, it's like handwritten notes, especially when you're at a certain size where like you don't know the team members' names for usually several months until they've been working with you. That was like a huge thing for me at first because I wasn't used to that and I felt disconnected. I'm like, I I want to show them that I care, but then I also can't be doing one-on-ones with them all and I can't be doing their training when there's hundreds of people, you know, over 100, I should say. It was a real, not a struggle, but like a learning curve for me was like, I've got to show my appreciation outside of just one-on-one or direct contact. And that literally might just be writing a note to them, putting on their desk and showing that like, I saw something they did that was amazing. And that could actually be the most impactful thing because the same way that I feel kind of disconnected or like, I feel bad that I can't have that same personal connection I did in the past. They also, that level, the level of impact of that note is probably higher because they have heard about me. They've seen videos of me. They have heard their managers talk about me, but they never have got that connection with me. And so for me to take that time and show that they are a person, they are not just a number, that means a lot. And then one thing I've leaned into a lot too recently is doing things for them that they would never do for themselves. And so this doesn't have to be elaborate. It doesn't have to be $10,000 and crazy. But for example, I'll just give this one, everyone here. I would recommend, or like what I have done that is recent, is it costs $250 for a full detail interior of someone's car. And they will come like a, a mobile detailing company will come. They'll do like the shampooing, everything, just like incredible. Most people don't do that for themselves because it's a luxury. but it's a $250 luxury that literally you blow their mind. And so giving those out, I give those now with my thank you cards, and so when there's something specific and I throw that in there, that's $250, it'll get them like a full out, completely well done interior cleaning of their car, and then the people will show up at the office and do it. And so I would recommend that. Things like that that show that you're not just like, here's $250. Yes, that's, that's nice. People will thank you, but they will absolutely remember the one time in their entire life they've ever got a luxury thing like that, which is a full-out mobile detailing at the office from you. How does one gain the discernment to realize they may be stepping over dollars to pick up pennies? Mostly because every single aspect of the business hurts as you grow. So if we look at liquidity, leads, labor, and leadership, all 4 parts get strained when you have business growth. But the one that has the most strain is the constraint, and all your time and attention should be focused on that. Any time spent on other things is considered firefighting, and you feel good and productive jumping from, "Okay, I gotta do leads. Okay, now I gotta get employees. Okay, gotta get some leaders. Okay, now I gotta raise price and do liquidity." And that makes you feel productive, but it's not necessarily the thing that makes the business grow faster. And so I would say you are tripping over dollars to go after pennies when you're bouncing from thing to thing, mostly for optics' sake. Instead of being like, I know that this one thing, if I just solved it, there will be other things burn. I will, I will be missing pennies, but I'm focusing on the dollar. And so everyone says in theory, or it is nice to say, I want to focus on the most important constraint or the biggest domino. And the reason we don't do it is because that means you can't go firefighting in all the other 3 categories of business. So liquidity leads labor and leadership. And I've just recently shifted to one. I have a video coming out this June, like, for the first time in like 6 years, 5, 6 years that I've shifted to one of those 4 L's. And that means other parts might burn, but I've been focused on the other 3 parts for the past 5 to 6 years. And so, now it's time to focus on this other one, which means 6 months of probably letting some other things burn that are important, that are really like pressing or whatever, but it's like, this is what I have to focus on. And I think that if you are constantly feeling good by chasing fires in all 4 of those L's, you likely have not figured out what the constraint is, i.e., what is the dollar bill that you are stepping over to save pennies. Will Kelly, we're looking at implementing a video training course for new team members that get hired for basic skills, mowing, landscaping, and doing weed control. We are also looking at implementing this for our orientation process so our regional manager gets their time back, which typically takes about 3 hours, and we want to do it in video form, ideally short form. For the hands-on training, a little bit longer for orientation. We would rotate the speakers and also ensure they're paying attention by cutting it up into smaller sections. We want to do a quiz at the end of each section to make sure they have to pass in order to move forward to get hired for their position. Can you maybe explain why this won't work, or do you think this is a great idea, or am I just wasting my time hiring a videographer? We just want to make sure that our training is top tier, dialed in, so we're duplicating the systems that we want. So I will say this, if you do 3 hours, you'll probably lose most technicians. I think you could probably get most of the benefit you're looking for in an hour or less. I don't think you need a videographer, a phone with a lapel microphone, like spend $100, $50, get a really nice lapel mic that connects to the phone wirelessly or even connected solid. Like for example, if you just do a voice note, plug, plug it into your phone and run it up your shirt and have a clip-on lapel and then just have the video from your phone and sync those two bad boys, you're going to be like, 95% of the way there. Your phone works just fine, especially because I think you'll change these videos within 3 months. Once we did all our videos and it's like, okay, here's the ones that didn't work. Now we've changed our type of mower, different type of truck. Okay. Now we've changed our process. Oh, we want you to change this. It's like you, you've been, you have to have an iterative cycle when it comes to videos. Everyone thinks like, I'm going to make this video training and it's done. No, like literally the next week you'll want to change a part of it or you'll add a system or you'll change something or add some equipment, add a new service. You'll change the way you're doing your uniforms or change the way that you're doing the tire pressure. Like something will And so the— I agree with cutting in small sections. I would also say 3 hours, you are going to suck the energy out of your team for technicians. If you're talking about technicians, it's going to suck their energy out. If you do it more of a group environment, mix in hands-on training, you will likely be able to keep them engaged. But most people that are getting hired for outdoor activity are not the same person that sits behind a computer for 3 hours taking quizzes and watching videos. I would strongly recommend Anytime I, I hear, I want to make, I want to save my manager time when it comes to hiring, I almost always have seen that end up being a very rough road. What I like to think of it is I am trying to systematize the training, but I need to meet the trainee where they want to be trained. And for most technicians, if you want them to actually absorb the information, they've got to go out and do it. I can watch all the videos in the world about mowing grass, but until I get on the mower and I feel the way things are operating, it's tough. That being said, there's a lot of knowledge that you could probably get in an hour or less, do the quizzes, do everything you've said, and get most of the benefit. The 3 hours starts to get where you're gonna lose them, but also you're starting to likely train things that are not just like dos and don'ts. It's more a matter of like feel. And then those are usually things taught out in the field. And that's when I would much more rather have like trainer and trainee relationship, checklists of what they gotta go through, signed off on bonuses and compensation based upon passing those levels, mostly because If you— there's so much churn in the first 3 to 7 days of onboarding, like just a good team member, whether or not they work out or not. And one of the best ways to lose a top performer is when they have 5 job offers. They came and gave you a tryout, and the first thing you had them do is sit down at a computer they dreaded their entire, um, educational career, or they dropped out of school because they hated it so much. They just want to be outside. They want to go out and do work. So just be careful of that. I'm not saying it's a bad idea. I would just shorten it down as much as possible. And everything to do with How to do the work I would try to do out in the field. Everything to do with safety, protocol, onboarding, payroll, software, equipment, those things are usually can be done in a video format. Um, just be careful with trying to optimize it. I've, I've just seen more and more of the, like, more and more I try to compress training, the worse it gets. The more I try to systematize the training and do it in a way that meets the actual demands of the job. The better. So completely different story when it comes to admin, for example, because they're sitting at a computer all day long. Mike DeLuca from Attaboy. Hey, I know you do not recommend syncing QBO with a CRM. That being said, how do you run on an accrual basis? My QBO still syncs with the bank account. It seems like everything will be done on cash accounting. Am I wrong about this, or is there workarounds that don't require tons of journal entries? Yes, if you are doing your QuickBooks and sync with the bank account, you're doing cash accounting. For the vast majority of home services, and businesses under $5-10 million, I would recommend doing that because it's the simplest. But if for some reason you want to do accrual accounting, then I would just run the reports of revenue earned inside of HomeWorks, and that would be like your revenue, because your expenses are coming out when they come out. That being said, things like insurance or software, things that you might pay in advance, especially towards the end of the year, you gotta now account for if you're doing accrual accounting. Like, if you pay for your insurance on an annual basis, you don't get a write that off as an expense in December, for example, depending on how rigid you're being with accrual. So if you're actually doing accrual, you would take the revenue side from HomeWorks and that report of earned revenue, and then you would look at your QuickBooks and have to determine, likely doing journal entries also already, to be able to figure out things like insurance payments, any sort of, even like paid subscription annually, anything like that would have to then also be journal entry. So for most small businesses, I would recommend— if you're an S corp, an LLC, you typically just— cash accounting is usually the easiest unless you have huge projects. And for example, you do not want to take $100,000 that someone gave you as a deposit in December because the work hasn't started and you don't want to pay tax on $100,000. But usually it balances out in the long run. But once you get like a C corp, once you start having huge amounts of inventory, once you start having a ton enough payments on trucks and equipment, I'm talking like hundreds of thousands of dollars, then potentially your accountant might push in the direction of accrual. Just do whatever your accountant says. Either way though, you're going to do some sort of journal entries, either trying to journal entry out revenue, or you're going to journal entry out expenses if you're doing accrual accounting. Blackbeard Lawn Care, last question: in your $220K lawn care business breakdown, you mentioned that you never want the worst month to be less than 50% of the best month. How should northern companies pre-bill snow removal handle that from a reporting standpoint? Should we be normalizing revenue monthly for internal analysis? And even after doing that, we still see winter months fall below 50%. In our market, Christmas— services like Christmas lights have to be installed during peak fall cleanup season or risk cancellation from early snow, which creates a direct labor conflict with higher-demand core services. At that time, do you still view that as a structural weakness that needs to be solved with additional services, or is the 50% benchmark not realistic in for snow-driven businesses.

Okay.

So I talk about this in the workshop. If you go to MikeAndes.com/workshop, it's free. Um, when it comes to the 50%, like that is a benchmark I've created as to which businesses I have consistently seen be profitable and not profitable in home services, the ones that sell and actually are able to exit versus the ones that can't. And anytime you try to sell, anytime you try to have good cash flow, anytime when a— for a quarter you lose money. So like usually it's Q1 for most people, they lose money or any month of the year where it drops below 50% of revenue. That being said, there's so many things you can do besides just adding more services. Just adding other services could include like that's cure 3, which is adjacent services like Snow. Yes, you can do that. You could also create a whole new brand. That's cure 5. Inside the workshop, which is for, like you mentioned, adding Christmas lights. The question becomes, well, if I'm already busy during fall cleanup, why would I even add Christmas lights? Then maybe that's not a good option for you. But there's other things you can do, whether it be winter services, whether it be more and better, which is, okay, can you sell anything else in January, February, March? What could that be? Could you pull spring rush demand forward for things like cleanups and offer big discounts to be able to get customers on in January, February, March instead of April, May, and June? Like, no, I'm in a snow environment. Environment. So then it's okay, well, can I include— inside of my winter services, can I include things like ice melt, shoveling the walkways and, and the stairs, and not do the plowing, for example? Or maybe I do plowing as adjacent services here, number 3. So I would look through the workshop. It'll give you 5 solid ways to fix the off-season. But any home service business that— like, that is— if you fix that, so many things good things happen. Because when you, when you know that every single quarter you make money, you don't have to keep so much cash in the bank during the offseason. And that allows you to have higher distributions. It allows you to be able to keep less working capital on hand. It allows you to have more consistent profit sharing so that if you hand it off to a GM, if you hand it off to managers, if you give profit sharing to your team, it's more consistent. It's much easier to run a business when you don't have months where you lose money and quarters quarters where you lose money and months where revenue drops by 70, 80, 90%. And so you have seen, yes, in that video last week, I talked about a business that's doing $220,000 and how they can fix it. You also, if you watch the Home Service Millionaire channel, you saw me talk to Stefano Narducci doing $5 million in revenue and same exact thing. We got to fix it. For him, it's the opposite. He does tons of snow and then revenue drops to 80 to 90%. We've got to fix that. It doesn't matter what size of business. It doesn't matter what scale, if you, if you're going to have quarters where you lose money or you have months where revenue drops by more than 50%, it's, it's very hard to run that business. And it is a solvable problem that will usually take 3 to 4 years to solve because you have to figure out your offer. When do I pitch it? When, what time of year? What offer do I need to give customers to be able to pull demand forward? What offers do I need to give them to be able to have a continuity throughout the rest of the off-season? Winter services, what we call it. So check out the workshop. It should be beneficial. But regardless of the size of business, this is the Achilles heel of every home service business. That's why The Off Season, the book I made, it's like the subtitle is Why Home Services Are Terrible Business. It is because of that. It is the Achilles heel. All right. Love you all. Hope you have a fantastic week. Look forward to some cool stuff we have coming out in May, and we will see you on the next mastermind.