LANDSCAPER LIVE! Q&A Call-In Show

Welcome, everybody.

We're gonna do the another live stream, the Q A call in show. If you want to be reminded when I'm doing these lives, the live shows with the call in, feel free to text this number on the screen. 360-227-6362. Just text the word landscaping. And then anytime that I am hopping on live, you can go ahead and just, you'll get a message. So I don't spam you with stuff. I don't send you stuff every day or anything crazy like that. Just if there's anything crazy going on or if I'm doing a live show, you can text or you can get notified via text message. So. All right, but today, today is the call in show. So let me switch this out. So if you would like to call in with a question, just call 361-733-3333. That is the live number for today. And I will be able to put you in here live on the phone. The phone calls will be the ones that are.

Prioritized. So if you'd like to call in, those will be prioritized. But I will be in the chat. Shout to Mike Callahan. Can't wait for summit. He's gonna be speaking at least one time time and I know him and Dan Ralphs will be there and looking forward to seeing everyone at landscape Summit. If you have not got your tickets for Landscape Summit, make sure you do mikegany.com summit again, if you would like to book all. I know sometimes it takes a while for everyone to get logged in here, but 361-733-3333. I'm taking calls today live.

All right.

Hello.

Wright Brothers Tree service. Let's go. Welcome from YouTube. Got Facebook coming in here. Very good. And then I should be able to add one more.

Let's add Twitch in here. I haven't done anything with Twitch in ages. I don't know if I can. There you go.

Okay, cool.

All right. Awesome. Quick announcement too. I have created another YouTube channel, separate just for lawn care tips. I know some people are like, I like the, you know, more lawn care only related content. You will want to subscribe to a channel I created called how to start a Lawn Care Business. It's pretty straightforward. Anything lawn care related? I did a couple videos last week when I was out doing estimates and made them. While I was out doing the estimates, I did two of them and then I did a whole bunch at a dealership the other day going through certain types of equipment, et cetera. So Feel free to. To subscribe to that channel as well. All right, we got our first caller, and it is coming in from five five one. Welcome the show. Thanks for coming on.

Hey, what's up, Mike?

Hey, good, good. Can you hear me okay?

Yeah, yeah, everything's good.

Cool. What's up, brother?

So, yeah, so I got a quick question, actually, two short ones. So first, when you do the budgeted hours for the mowing, right, and let's say your guys are on P4P, does the entire budgeted hours for that job count? I'm sorry, I'm having trouble phrasing this, but for the, you know, like how you do with the project, right, It'd be budgeted hours plus materials. So let's say the. The mowing price is 35.

Yep.

And the hourly rate is 70.

Yep. Right.

So you got 15 minutes.

30.

Is that 30 minutes?

Yeah, yeah, yeah. So is that all included towards the budget hours for the guy?

Oh, I see. You're saying. Yeah. So I'm guessing you're talking about, like, do you include drive time and things like that? Is that what you're asking?

No, no, I understand that. It's just like, let's say we're paying the guys P4P on the morning route.

Yep.

And you have budgeted hours, like 30 minutes on a mowing, right?

Yep.

And.

And so does all of that go towards the guys? You don't include, like, you know, anything else within that price.

Got it. Yeah. No, no. A hundred percent. I hear what you're saying. Yeah. For mowing and for maintenance work, we consider all of the revenue. Labor revenue. So when we make our. There you go.

That's.

Yeah, so we consider 100% of that revenue. Labor revenue. And, you know, some people could break it down further if you wanted to pull out, you know, a percentage of it for, like, dump costs, if you, like, have to dump clippings, for example. But we just try to keep it really simple so the guys can see. See, we. We don't mind them seeing all of the actual cost to the customer, like what we're charging, because they know they can just do the math very quickly and say, okay, I'm making 30 or 33% of that revenue. And so in that case, labor revenue would equal total revenue because there's not material cost estimate fees, dump fees, and other costs associated. Does it make sense?

Yeah, yeah, yeah, that's exactly what I meant. And real quick, a second question is, so what would be your process to acquire business line of credit?

Say that last part, what Kind of clients?

No, a business line of credit.

Oh, I got you. Do you already have a banking relationship with like a local credit union or something like that?

Yeah, I got all the basics and done number. It's just what would be your first try to get trade lines or something like that?

Yeah, the first thing you want to do is really just go down and sit down with a banker and honestly, like especially your business grows, bankers become more important. Like probably for my first six or seven years in business, I didn't really think about who was doing my banking in terms of the person at the bank. But ideally you get with someone who's been at that bank for quite some time, they don't plan on going anywhere and you can build up a relationship with them. And so typically at most banks, you're going to have to submit your financials every year to that person. And so in terms of start, you know, the first step, it's really like setting up the appointment at the bank and just like, hey, I want to create a line of credit. My goal is to be able to expand my business over the course of the next several years. And every year when I come in and I submit my financials, I'm going to ask for an increase in my line of credit. And just being upfront and honest with them, what you're doing. And just keep in mind they want to know why you're using it. They don't just want to be like no use. Like what you want to typically say is like working capital. It's like, hey, I want to have this as sort of my security blanket. I want to have this in case there's an opportunity for expansion or acquisition and just start building the relationship with that banker because it'll become very valuable down the road when you want to expand your line of credit. And I always say to everyone, like, you know the 1% origination fee that you might pay on that line of credit, you know, if you have $100,000 line of credit, they might make you pay $1,000 if you. It's the cheapest form of insurance for your business because something crazy happens. Even if like there is a damage and you have to pay the deductible on the insurance claim, you know, even that might hurt you if you're just getting started. So being able to have a line of credit super value. That being said, lines of credit are unsecured lines of credit, which typically means you don't have any collateral against them. Now if you collateralize the line of credit, things like your Trucks, your equipment, et cetera, means it's going to reduce the, the amount of risk associated with your line of credit and therefore the bank is going to give you better terms, lower interest rate, et cetera. They're probably going to even increase your line of credit a little higher because the risk is less. Just keep in mind if something goes wrong now, they're going to come after your equipment. So I don't mind collateralizing my lines of credit because, you know, if I have my. If someone has to come after my equipment, there's bigger problems that I'm dealing with. And it typically allows me to give of larger lines of credit. I've only pulled my lines of credit once, my business lines of credit, and that was during COVID when it first started. It shut down everything and we didn't know what was going to happen. Especially in the state I live in Washington, where everyone was really freaking out. That was the one time I pulled all of my lines of credit and just created like a war chest of cash just in case. Cause I didn't know it was going to happen. And that is definitely that security blanket that you want to have in the case of having a lot of, you know, unsurety of where the market's going or what's happening in the political economic climate. So highly recommend everyone get a line of credit because when you need one most, they're not being handed out when you don't need them. When you don't need a line of credit is when you should go get one. Because banks love to lend to people that don't need the money. I know it sounds crazy, but that's the truth. And so if I would have been going trying to get a line of credit During March of 2020, there would have been no bueno. No one would have wanted to give me a line of credit. It was too risky. No one knew what was happening, especially to a gym, like an. Or an owner of a gym that was about to get closed for an indefinite amount of time. And so when you need it most, they will not be able to open up the line of credit. Open it when you do not think you need it, because that's when they're willing to offer it. Next caller is coming in from 71 7. Thanks for coming on. Welcome to the show.

Hi, how are you?

Good, how you doing?

Good, good. Hey, question for you. What is your process for raising rates on recurring customers for like, mulching and maintenance and things like that? They kind of each. They kind of change each year. You know, customers Will have us come in and we'll start with, you know, our normal mulching and then they'll want us to add something and things like that. What is your process for like raising rates for the recurring customers and how do you manage P4P on things like that? I'm just in the process of possibly trying to switch over to P4P and I'm just trying to get my grasp on like how to manage the. The process of doing that.

Yeah. So when you say recurring services, you mean like an annual or like more like every six month piece of work? Like mulching you mentioned, right? You're not talking about like mowing, Correct?

Correct. So like mulch. You know, most of our customers will call for mulching, shrub trimming, you know, spring and fall cleanup, things like that that are, that are going to be every year that, you know, I don't want to go out and rebid them every time to do them. So we, you know, we just send our guys out and then we bill them for whatever services we provide.

And they basically come to the grips. They're okay with the fact that you're just going to show up every 3 months, 6 months, 12 months, whatever, perform the service at that same price and they're just kind of expecting that then you don't have to, you're not having to re engage them for that service.

Correct? Correct.

Cool.

Yep.

So I would treat this like mowing and that is like look, same thing was for mowing. And that is like someone expects me to show up every week or every two weeks and mow their grass. So the only time I would, I don't need to ask them to show up every single week, that's horrible. And so that's great what you've done. The fact that you're able to get away with something mulching and where someone's not not respond, you know, having to ask you every year for mulch and you're just doing it. That's awesome. I think you're gonna. You'd be surprised just how sticky that will be because no one wants to go find someone else to get on that kind of schedule again. And if they trust you enough for you to just come and do mulching or do bush trimming every three months or 12 months, especially the 12 month one, it tells me that they're not going to leave. And so I would just simply send them an email like, hey, from now on these are the prices going forward. And I would get in the habit if I was you. Doing that every single spring, even if you don't raise their prices. Because then what this means is if you, you know, assuming you're going to keep this business for a long time, if you're every single spring or every single winter, you send out their pricing of all their services for the year, they're just going to come to expect that. And then when you want to raise prices, you'll just change those numbers and they will literally not bat an eye because they're just like every single year, like, hey, this is the renewal and no action is required on your side, just letting you know what the prices are for this upcoming season. And I think very, very few would ever get back to you if you change those numbers and needed to raise prices. And then in terms of the P4P side, you have to ask yourself, when you raise those prices, is that going towards the budget hours or is that going towards more materials? Now, I'm going to assume you're probably raising rates on labor, but you're also raising rates on things like the cost of the mulch, the cost of dump fees, et cetera. And so you just want to figure out that math on each line item and what service is, you know, are you raising the mulch by $200, which is, you know, four hours at $50 an hour, or is $100 of that expense because the, the cost of mulch has gone up. Exactly right. So as long as you can figure that part out when it comes to pay for performance, you'll just want to adjust your budget hours for that upcoming visit according to how much of that price increase is coming from labor versus coming from material markup.

Okay.

Awesome, man. Best of luck and congrats on. Good stuff, man.

Yeah, thank you. I appreciate it.

You got it.

Thank you.

All right, next caller is coming from.

773. Welcome to the show. Thanks for coming on.

Hey, how's it going?

Good, good. What can I do for you?

All right, so my question is, I just started my long term business two years ago. I started with one truck. Now I'm working three trucks, six people, including myself. And my question is, when I first started, I'm pretty sure we all start this way, but we don't have our contracts in place. How do I introduce contracts into my current clients without them thinking that it's like when, when we all think contract, we always think.

A year or that we have to stick to that contract. How do I introduce them? Or how do I explain to them that now we're going to be working on A contract basis.

Cool. All right, so let's break this down. So in terms of the contracts, what services are you providing for them? Are you providing kind of like full service maintenance, like all different aspects of service around their property, or are you just doing this for one specific service?

Most of our clients are just regular lawn mowing maintenance. We have weekly, we have bi weekly, we have a couple commercial, but it's mostly already residential properties.

Okay.

So mostly I'm trying to see if the contract. Yeah, yeah. So I actually just had a client call me and she said that.

She doesn't think it's fair what we're charging her if we're just showing up to her property and being there for 15 minutes and charging her the amount that we're charging her. But what it really make her happy is a job that could take us 15 minutes, we just stay there at her property for an hour and she just doesn't want to pay up what we invoice, you know. So I'm, I'm, I'm trying to introduce contracts just so we could go ahead and have that money saved and not take a loss on it.

Okay, so that's, that's the part I want to dig into. That was the next part I was going to ask. And that was why you're doing the contracts. So why do you think that having the contract is going to make her any more happy?

Probably security. You could say it gives you security.

It gives you security because of a signature on that, on that contract. But let me, let me say this again. Like, how is this gonna make the customer happy? She's still going to complain. She is still going to be unhappy. And I can, I can promise you she'll probably be more unhappy due to the fact that now she's going to feel locked in to a contract. The same way that when you call Comcast or Verizon or some other telecom company and they're like, oh no, you're in this contract for another six months. How does that make you feel? Right. And so my thing is this. Our. Are you willing to enforce a $200 per month contract and take someone to court over it? Is it worth the publicity? And what is going to be said on social media when she goes and tells everyone that you sue your clients because you were doing a bad job and you wouldn't let them get out of their contract? Because that's what's going to be said. And so I would be very careful. I think a lot of times we get a one off complaint or someone Canceling in the middle of the season. And we're like, we need to do contracts when in reality it's not going to make the customer happy. Are you really going to take someone to court over that $200? And furthermore, are you going to hold them in a contract when they're unhappy and trying to make your life miserable because you're holding a contract over their head? Like, they're not going to treat your guys good, they're not going to tip them, they're not going to treat you nicely, they're not going to be doing anything good, they're going to leave you a bad review. And so in my personal opinion, contracts are not something that is needed in this industry. I'm a big fan of having in some markets level billing, like where every, if you want to help your cash flow, like, hey, every, every month of the year we have all these different services, but then we have the same monthly pricing year round. That works in some markets and some markets very popular and almost the standard. But I personally don't think you're going to go take someone to court and I don't think you should because it honestly is going to hurt your brand image more than anything. And, and what it does more than anything is add friction to the sales process because now you've got to explain to Mr. Jones before he gets the job accepted why he's got to put a signature on a one page of terms and conditions. And so that would be my only apprehension. And what's your response to that?

Well, my response, basically we had a couple losses just because we try to trust our clients and we try to just go ahead with words, with the word of mouth. But I'm currently working with jobbers, so once the service is made, we go out and we send the invoice. But sometimes there's clients that wait. Two services, three services, four services. And then once we get to that fifth service, we never hear back from them.

We.

So we're trying to trust that client, but if we can't trust them, how do I prevent that loss?

Yeah, totally. So I think this is more of a billing and invoicing issue in terms of what you're trying to solve for. And I think a lot of times people will jump to contracts as the solution when it adds friction to the relationship, it complicates customer service. And I've just not seen it work really well when it comes to sales. So what it sounds like to me though is yeah, you should probably require a credit card on file. That's Pre authorized before starting service. So like literally starting on Wednesday at Copilot we're having this feature. I don't know if Jobber has this or not, but that is the ability that before someone accepts an estimate they are required to put a card on file. And then the week after that we're working on the one where in doing so they have to pay a deposit based upon the threshold of that estimate value. And so I'm a big fan of that. I'm having a pre authorized credit card because like when you put the card information in stripe can test it and see if is this a valid card number. And so I would recommend doing that or switching your billing to, to where you bill every single time if that's a big concern to you. I would also say that too. I find too many people will make business decisions based upon one or two or three customers doing something in the same week. And I mean like, oh my word, everyone's doing it. It's like, look, you have 300 customers. You're growing really quickly. You've gone from one person to three people in the past couple years. Like slow down a little bit and realize that it fluked. You fluked out in that you got 1, 2, 3 people cancel or something like that. This time of year is very common. Try not to overreact. That being said, if it's always happening and when I say always, I mean like that's happening every single week, then you might want to change your billing requirements. And I would probably say require card on file before they get started for service and or bill more frequently. And instead of doing those four visits and then billing them on the fifth one, you would be billing them every single week. Next call is coming in from 5:1:7. Welcome to the show. Thanks for coming on.

Can you hear me?

I can. How's it going?

Hey, I'm good. This is Cody from Lansing area, Michigan. I am just calling because last year I had like four or five snow plowing customers and I was just kind of learning how to, you know, do snowplowing. It was the first time I ever did it. So I kind of got like a little residential snow contract set up. I wanted to get something that was a little scalable so I could scale it this year.

I'm wondering if that's even necessary to have a residential snow contract. It's really just liability. There's no like terms as far as we start this date and we end the state. We do say in there we won't do it past those dates, but we're not locked in anything in the contract. It just says email us or call us like if you want to get out of this.

So you know, truly. But it was done by a lawyer. It's done. Well, I just not. Tyler, the president from Washington, he was telling me that it just too much friction in the sales process for a residential contract. I mean it's not necessary. But what I'm concerned about is when we have hundreds of them potentially five plus years down the road and I'm not the one that's on the property, is that too much risk to not have a, have a liability contract up?

Yeah, like I would say the difference somewhat in Washington, like where, where he's at and like where I'm at is when it snows here, it's like twice a year maybe. And people are literally so desperate for someone to come show up at their property they will literally pay anything. But we just don't get frequent enough snow for most people do snow plowing. So it's not as common to do contracts. No one here thinks about snow until there's snow a foot of snow outside. That's just how it rolls around here. However, I know there are markets and if you're in Michigan, this is definitely true. And that is people are setting up snow plowing in August, September and October. And so contracts are much more common because if you know it's going to snow 10 times or thereabouts throughout the year, you want to make sure that you have someone scheduled to come and do your service on your property. So residential in Washington contracts literally no one even thinks about until there's snow on the ground can guarantee that. So I would say in terms of the contract itself though, don't overthink it. I would literally go on a chat GPT and I would ask for a residential snow plowing contract because the main thing you're looking for as is locking in the frequency of.