LANDSCAPER LIVE! Q&A Call-In Show

Hello, everybody, and welcome to the Mike Andy Show. Today's podcast, we have a Q and A covering revenue, acquiring a business line of credit, raising rates, and introducing contracts to existing systems. For those of you in the service industry, and more specifically in the lawn care industry, we have created a second channel just for you containing the ins and outs of what it takes to start and run your very own lawn care company. More specifically, we're building an archive to answer some of the questions about pricing, hiring, firing, credit equipment and and more. Check it out and subscribe to how to start a Lawn Care Business.

Welcome, everybody.

We're gonna do the another live stream, the Q and 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. 360227, 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 and I know him and Dan Ralph 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 mikeanny.comsummit Again, if you would like to call. 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. 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 create 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 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 etc. So feel free 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, too.

Short one.

So first, when you do the budgeted hours for the mowing, right, and let's say you guys are on P4P, does the entire budgeted hours for that job count? I'm sorry, I'm having trouble phasing phrasing this, but for the, you know, like how you do with the project, right. It'll 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 to.

Is that 30 minutes?

Yeah, yeah, yeah. So is that all included to towards the budgeted hours for the guy.

Oh, I see what 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 a mowing route.

Yep.

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

Yep.

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. 100%. 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 right.

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, 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. Ein Duns 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 starting or 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. Um, 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 a hundred thousand dollar line of credit, they might make you pay $1,000. It's the cheapest form of insurance for your business because if 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 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, 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, if I have my, if someone has to come after my equipment, there's bigger problems that I'm, I'm dealing with and it typically allows me to give a little bit 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 and 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 because 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 unsurity 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, 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. Now, next caller's 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 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, 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, and they've 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, having to ask you every year for mulch and you're just doing it. That's awesome. I think you're going to. 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, 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, 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, you'll just change those numbers and they will literally not bat an eye. Cause 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 molts, the cost, the cost of dump fees, et cetera. And so you just want to figure out that math on each line item. And what service, you know, are you raising the mulch by $200, which is, you know, four hours at $50 an hour or is a hundred dollars 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. 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. 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 contract in place. How do I introduce contracts into my current clients without them thinking that it's like when, when we are being 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 the 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? 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 property.

Okay.

So mostly I'm trying to see if the contract. Yeah, yeah. So I actually just had a, 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 would it really make her happy if 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 trying to introduce contracts just so we could go ahead and have that money safe 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. What? 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 the next six months. How does that make you feel? Right? And so, um, my thing is this. 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, 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, is needed in this industry. I'm a big fan of having in some markets level billing like where every, you know, if you want to help your cash flow, like hey, every, every month from 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, and I don't think you should because it honestly is going to hurt your brand image more than anything. 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 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, 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 you should probably require 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 is this a valid card number. And so I would recommend doing that or switching your billing 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 be 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 of years. Like slow down a little bit and realize that it fluke 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 a 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 51 7. Welcome to the show. Thanks for coming on.

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Can you hear me?

I can. How's it going?

Hey, I'm good. This is Cody from Lansing area in Michigan. I am just calling because last year I had like four or five plumbing customers and I was just kind of learning how to, you know, do so long. 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 this date. We do say in there we won't do it past those dates, but we're not locked into anything in the contract. It just says email us or call us like if you want to get out of this.

So, yeah, totally.

But it was done by a lawyer and everything. It's done well. I just am not Tyler, the Francis from Washington. He was telling me that it's 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 to 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, 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, and I would ask for a residential snow plowing contract because the main thing you're looking for, as is locking in the frequency in the trigger as well as giving yourself, clearing yourself of liability, those are the two major things. And I would make it really simple. Don't overthink it. Because the more terms you add, the less likelihood they're going to actually read it and the more they may potentially get scared away. Now again though, in Michigan they're going to be used of contracts for snow. And so I would say in your market, it's not a bad idea to have one. But don't overthink it. Don't make it a page long. You don't need to buy a contract. You can go and chatgpt and ask for a residential snow plowing contract. It'll give you a good three or four terms that you can get printed off. Put your letterhead on it and get that signed by customers. I wouldn't, I wouldn't overthink it too much.

Okay, gotcha. And then last thing real quick. I have a little condo association. It's in the back of a neighborhood. There's probably like 25, 30 houses throughout the neighborhood, just one kind of circle. And in the back there's a condo area. And we do the mowing for just the condo area, not the whole neighborhood. But the manager of the condo association just reached out and they want us to give them an estimate for plowing the entire neighborhood and the condo parking lot. And I've never, like, I, I only have the experience of doing four or five driveways. I talked to Tyler about this. He, he told me I should do it for the experience and just to jump into it because I'm the one that would be following it so I can learn it myself and figure it out and it'll be good for me to know. But I'm more concerned about, I have no idea how to price it. I also have no idea where to push snow. Like, like the actual logistics of doing the job. You know what I mean? Do you have any advice like how I can figure these things out quickly?

I think in terms of like, the logistics of like where to pile snow, et cetera. I think a lot of these questions can be answered on YouTube. Where to pile snow for, you know, snow plowing contracts. I know like what's his name? Dirt Monkey has some great videos on this. There's other people that do lots of snow plowing that will show you exactly where to pile it. They'll do the schematics from the aerial and show you where to pile snow. In terms of whether or not you should do this kind of job, you should make sure you are confident on the budgeted hours. Do not bid a job that you could lose your shirt on or feel you got to go into this. Like, look, I know I need to charge this job to break even. If I can't make that, I'm not doing it. Even if it's going to mean losing out on this experience.

Just realize that if you're young, you're growing your business, there's a lot of other opportunities to go make it, have experience and make money doing it. So don't feel like pressured that you need to go lose money on a job. That being said, when it comes to commercial, you do want to take a little more time in your contract. Again, I truly believe ChatGPT will make a plenty fine, decent commercial snow plowing contract. But the thing is, you're going to have a lot more liability due to the fact that especially if you're plowing someone the streets. Every state is different, but liability is going to be very different when you're plowing a street versus a residential driveway in most states. So talk to your insurance person because you just might be doubling or tripling your general liability policy by going on the street or versus going on someone's driveway. And you want to make sure that you also are covered in terms of the language of you're not responsible for the cars on the side of the driveway, you're not responsible. And this name and list off every piece of property you can possibly think of on that contract that you're not going to be responsible for. Because that's my bigger apprehension is the matter of you getting into something you're not experienced at. Hey, we all have to start there somewhere. YouTube University has to train everybody and at some point in time if you're getting started, however, I don't want you to lose your shirt over something simply because you're not covered from a legal standpoint and an insurance perspective. So check with your insurance as well as make sure that contract is buttoned down when it Comes to your liability. Next caller's from 5, 7, 3. Oh, I think I've already talked to you today. How's it going?

Hey, going pretty good, Mike. This is Joshua Drama lawn care. I don't know that we've talked before.

Oh, I think you called me.

I got a question for you on.

Drop your call or something like that.

Yes, it did.

Okay, that's it. Gotcha. It's a last call today, so you're good. Go for it.

Okay.

No, I apologize. So got a question for you. On raising prices, I became painfully aware that we were shooting for $60 per man hour when mowing. But what I didn't take into consideration is that probably about 20% of our day is non productive and that puts us down at about $48 per man hour over an 8, 9 hour day. And that's not gonna work. So we're going to have to raise prices on a lot of our customers. And I was wondering, we shoot for $80 per man hour on property that would average out about $60 per man hour throughout the day. We're gonna have to raise some, you know, customers prices by 20 to 30%. Is that acceptable? How would you do that?

Well, no one wants.

To raise. Yeah, no one wants their prices to be raised. So acceptable the customer. No, but the bottom line is you got to stay in business and it.

Right.

And the ideal customer wants you to stay in business because they don't want to go be figuring out who's going to mow their lawn every single year.

Right.

And so the ideal customer is willing to pay and happy to pay more to make sure that you are taken care of and that they don't have to keep finding contractors. And so I don't know if you watch the video I posted yesterday on my main channel, but. But we raised prices on almost 300 customers. And in the video I said we lost a few. I think ultimately I think we ended up losing about 10 customers and then they dropped about 15 more. But literally, if you do it right and you have a customer base that is solid and they like your service, if you can raise prices at a time when everyone else is either really booked out or is really hard to find employees. So for example, if the drought right now is actually a really good time to raise prices. Prices, because most contractors can't get anyone to come to work and so they aren't taking new customers. So the a great time to raise prices is during that time. But honestly, if you're hitting capacity, like all your guys are busy all Your trucks are every single day and you're, every week you're getting a couple more clients. You should absolutely, if you're hitting that capacity limit, raise prices. Like right now, what I would say is, could you take on, you know, 20 more customers without having to buy more trucks or hire more people? Or are you kind of at capacity right now?

At capacity with our trucks, not at capacity with our workers. I'm fortunate enough to have almost extra worker. We're scrambling to keep him busy, which is, I know, kind of rare in our industry, but I'm very fortunate on that. Our trucks are a limiting capacity or a limiting factor in this. But you know, we have two trucks on the road and when they're not generating the income that they should, we got to figure something out.

Got it. So what I think that the, what you're probably facing then in the back your mind is, what if I raise these prices, I lose 15, 15% of my customers and I'm already not really having enough work for my guys. So this is how I would look at this is just for your peace of mind, maybe take one third of your customers and raise prices on them. I think you'll be shocked at how few cancel. That's going to solve your profitability problem and it'll also unlock the ability to go get financing on another truck. Because if that's your capacity, I'll talk about this at conference. But you got to find what is the bottleneck of the business. And right now the bottleneck for your growth is, number one, is getting more work for your crew. However, it sounds like you can't do that because you got this, the truck capacity limit. And so if you're able to unlock, you know, how many, how many million customers do you have right now?

About a hundred, 100 mowing customers. Some of those are, you know, HOAs with 29 homes, but we just consider that one customer. So yeah, 100 customers.

So I, I would bet, I would go to, I would bet that you're going to bring an extra three to $4,000 per month in profit to the bottom line if you raise prices across the board by 20 to 30%, like easily PO, probably more. And what you should do is track that. Like look at, look, take all of your per cut pricing for your a hundred customers, right? And then put what you're going to raise them to at the bottom. You're going to have how much you're charging per cut across the whole board and then what your new pricing is going to be in terms of new Per cut. And I think that number is going to be a couple thousand dollars per cut in difference of price. Now once you do that, that's going to be what you need to convince yourself that you can go afford buy another truck. And by having that other truck, that's going to unlock more capacity for you. Then if you don't have enough work, you're going to spend that extra profit on marketing and fill your schedule. So let's say you have $4,000 extra per month in profit by doing this price increase. And you know that from doing the math, you're going to go spend $500 a month on getting a good truck. Get a payment. I don't care whether you have cash to do that. If so, great. If not, just go get payment. You now know you can afford it. You made $4,000 extra in profit and honestly you're probably gonna make more than 4,000 in profit because the customers who leave are the ones that are causing most pain anyways and are already underpriced. And so we're now at 3,500. That 3,500 is now what you're going to deploy maybe half of it or a thousand of it towards marketing to fill the schedule and replace the customers you potentially might lose from the price increase as well as keep your current one guy that isn't as busy as fill up his schedule as well.

Okay, that makes sense. One other question. With that whole raising prices and trying to read our meet our quota of $60 per man hour. We have switched a lot of our jobs out of push mowing jobs to walk behind mower jobs. Kind of the same concept. But some of our customers are complaining about that and they want to go back to push mowing. We are on the fence. My workers don't like push mowing. They'd rather walk behind a self powered mower than push push a mower. Is there any consideration I should get to that? I mean, I want to keep my employees happy. Pushbulling pays well, but we do. We have spent money on equipment that I hate to have sitting in the shop while we're pushing pushing lawns.

Are your guys on PvP?

What's your sage advice?

Are your guys on P4P?

They are not.

Okay.

They are not. It's something I've been pushing them towards and they keep saying no, I want to, I want hourly. And so I tried breaking it down to them and saying hey, you'll make more money. They want the certainty of knowing that if they work, this is what they're going to get paid. Even though I've guaranteed them you will get more. They're good fellas. I am positive they'll make more money.

Okay, yeah, that's a little tough because what I was going to say is if they're on P4P, it's like, hey guys, we're going to raise these prices on these push mowing customers by 30%. So you're going to make 30% more money on these jobs, which equates to going from $25 an hour to 30 plus an hour. And we know it's painful and you don't like it, but we're willing to raise them even more if we need to. We want to make sure you guys are on the same page though, before we do this, when it's not, when it's not P4P, I would offer a raise and make the change with that. Right? So again, if you know you're raising prices, you can afford a little extra there, right? So you know, maybe at 4500 going for that truck, maybe allocate another $1500 of that towards a raise for the guys. But what you're going to do then is, is say, hey guys, we're going to raise wages because we need to add some mowing, push mowing customers back in here. And I know you guys don't like that and I know it's painful, but that's, we're going to raise the prices, the customers to afford a raise for all of you. That's how I would word that. And make sure you talk to them first and they get the buying. Because like I, I believe you say, hey guys, we're gonna, we're gonna be able to afford $2 more power for everyone on the crew if we can just push these, do all these mowing customers with the push mower. Now I know it's not fun, but we afford $2 more per hour. And you know you're gonna go raise prices to not only those push mowing customers, but everyone in general and be able to cover that cost.

That makes perfect sense.

But I would talk to your guys because it's harder to find, it's harder to find those guys that are like that than it is to find another customer. So if you have 10 or 15 customers, you're gonna lose because of the push mowing thing. I would rather lose them than lose your solid crew. Like, sounds like you got those. So I would talk to your guys first, get them on board. And I think most people, the guys, they'd be Willing to take an extra 200 bucks a paycheck in exchange for pushing some of the lawns with a push mower.

Okay, that makes sense.

Cool.

Thank you very much.

Appreciate it.

Absolutely. All right, next caller is coming in from 774. Welcome to the show. Thanks for coming on.

774. You might.

Am I on?

Yep, now you're on. What's up?

Hey.

Hey. I was just wondering, so we charge cards weekly for our lawn mowing services, and I was just wondering about how many cuts would you go for a.

Card that gets declined?

I think if I was charging weekly, I would, I would change my, my thought process a bit. Right. So for us, when we usually charge monthly, I'm okay with it being a couple weeks, like for, for them to go through the automation process of getting a new card on file. I'm also in the state where, like, cash flow isn't as important to me. I'm more trying to keep them throughout the drought seasons. I want, I don't want to be hitting their card four or five times a month. So that being said, if I was to go to weekly, I would be much more cutthroat because I can't. I do not want multiple bills stacking up on top of each other. As soon as you get like 2 and 3 bill invoices unpaid on someone's account almost all the time, they'll cancel. And so I would be probably more cutthroat with it. I'd probably make an automation sequence. Like after, you know, it gets declined, it notifies them. And like every two days for like the next six days, it's notifying them. So they get like three notifications. And then it would notify you if they haven't updated their credit card by the time, you know, a week rolls around, I'd be probably very cutthroat with it, maybe letting one more go through. But I know most people who do weekly, the big reason is for cash flow. And if that's your reason, you should cut people off as soon as possible if they're not paying. And just train your customers like, hey, you don't, can't, you don't not pay us, and if you don't, we're not showing up next week. And for someone who does accidentally do that, now all of a sudden their lawn's, you know, overgrown because they, they forgot to pay you. And you know, they will never forget again if they really want your service.

Right. Yeah, we have, we have maybe about three or four people that frequently it gets declined. But if you try it on Friday, it'll go through. But some of them then, you know, it was a couple of weeks, then it's like how much longer?

You know.

Yeah.

How much longer do you really go?

But all right, which.

I appreciate that.

Which part processor do you use?

It's through Jobber. So it is.

Yeah, they, they do Jobber payments. Yeah, yeah. So in Stripe for example, you can, you can set it up and actually charge people who like if their car gets declined, you actually go in there like retry it automatically, which is kind of cool. Um, but just a thought. I think if you create, I know Jobber have automations but like you could just make sure you think for a second because I know they have invoice follow up. Right. Like reminding someone if you an overdue invoice.

They do, yep.

Can you make your invoice due upon receipt? So that way the follow up start like the day after the cards declined.

That's a good idea because I think mine. Yeah, that's actually a good idea to think of that.

Yeah, I would try that. We've always found, we've always found when someone's due upon receipt, they pay way faster simply because the moment they get that invoice, if it's not paid, it says overdue. So. Cool. We got some questions coming in.

I want to get into using Google Ads to grab hot customers. Is it best to use an agency or get best return on investment? Um, agencies are fine. I like to learn from agencies, see what they're doing. But just remember, if they're going to cost $500 a month and you cost and you want to put an ad spend of $500 a month, they better be beating your cost Per click by 50% otherwise you might as well just do it by yourself. So I'm a big believer in learning from agencies. But ultimately again, if they're, if they plus their cost, your ad spend plus their cost is not able to beat what you would be doing otherwise by yourself. Then it just makes more sense to do it yourself unless you want to save yourself time wise. Tech integration progress report literally any day. It's a security thing that's getting ironed out and I'm hoping within a week or two. But I've been hoping that for the past month and a half. So I know we have to have it done by November just because of a couple things, but it could literally be any day that is pushed through and then it'll show up on a Wednesday when we release on Copilot for features Just bought my tickets in Airbnb yesterday. Cody from Lansing, Michigan Streamline Lawn Care. Let's go Cody. Mikeannies.comsummit Buy your tickets today for landscape Summit is the is the how to start a lawn care business run by AI? No it is not run by AI Terrell on the team cuts up these shows as well as.

Stuff I make specifically just for lawn care and related so.

How do you charge for weed eating? I'm kind of sort of figured out how to charge for mowing. I would charge it the exact same way because you're ultimately selling the same thing and that's time. Is it best to charge by the hour on weed trimming? If so, how much do you charge? No, we charge still budget hours. Actually this is a great plug. How to Start a Lawn care business the YouTube channel. I made a video of me out in the field doing an estimate for weed trimming as you call it, or weed pulling. And I talk this part whole part through. So feel free to look that up on the other channel. I'm actually in the field doing an estimate. It I have an established company with two guys running most of the mowing and whatnot. I really want to move out of my area but my company is doing great. What numbers are my what is doing great numbers? What are my options? You could sell or you could build the business to the point where it could run by itself. It's a little more difficult because you probably I don't know what your size is. It sounds like how many? Oh, two guys, one guy, two guys. That's tough, right? Like because at that size you're going to be hiring someone that is not full time manager, like general manager or sales. It's going to be someone who's really out in the field. So like a working gm, but you're also at the size where they're getting quite a few calls. There's a lot of admin work, running payroll, etc. And it might there might not be enough meat on the bone for you to go leave and make it profitable. That being said, I think if you took 16 to 18 months and really focused on optimization and increasing prices to make it more profitable, let's say right now you're doing 250,000 in annual revenue. If you can figure out how to make that go from two 50 to 300 without increasing any of your cost and make it $50,000 more profitable, that $50,000 now gets deployed against a working GM. But again you're probably not making that much profit right now. I'M just going to guess. I'm just guessing. Let's say you aren't. It's going to take you a year, year and a half to raise prices, optimize your route, cut out customers you don't want, simplify services, create systems that you can hand that off.

Regarding the raising cost, do you believe easing regular at a lower percentage or once yearly at higher. I don't like to do it a lot, to be perfectly honest with you. I'm really looking at my capacity and if I'm, if I'm. If all I'm at capacity in terms of trucks and that capacity with my labors, I'm raising prices regardless of anything else. So whether I do that five times a year because I'm just like constantly getting new customers and I don't have any more trucks or employees or if that is happening once every three years, it doesn't really matter. That's why I'm a big fan. Like grow to capacity, raise prices. Keep raising prices until you raise capacity.

How can I grow to get commercial clients? I have some videos online. Feel free to look at that. The call in numbers in the top right hand corner. Just got my ticket for summit. Let's go, let's go, let's go. It's gonna be great. It's gonna be awesome. What, what good charge for regular lot. Just really depends on your square footage in your area. Started this year in business. Thanks Mike for the YouTube videos. Got it. If you want to sell your business, I think having contracts probably adds a lot of value to the business buyer. Again, if they're willing to go enforce 400 residential contracts in court, then it's valuable. Mr. And Mrs. Customer, we don't have contracts. We do encourage our customers to stay with us year round. We like to maintain a full schedule for our employees and we reserve a spot for you in the next. For the next year. You decide to cancel, that's okay. But just know we won't prioritize you for the start of the next season. Yep, I love it. Yeah, we don't have contracts that. But there's similar verbiage to what we use in the early spring when we're selling, we use a selling feature and it's like, hey, you know, we only have so many spots available. You better get on because we can't guarantee later in the year we're gonna have any spots available. Looking to swapping to both copilot and the P4P software over the winter. I'm currently tracking P4Pmanually. I'm just curious how the clock in and clock out process works when using the software. You don't need to use Copilot in order to use P4P. If you're doing P4P now by manually, I would do P4P right away. Whether or not you switch to Copilot in the future, it will be nice when they get integrated and we're working on the integration right now. So that way if someone clocks into Copilot automatically creates a time card inside of P4P and then it also brings in like things like budget hours and rate and everything across. So there's no double entry.

But in terms of the clock in clock out process, there's a mobile app and for P2P they clock in and out on there and we have what we call 3D notifications or data driven decisions that use the data from the app and tells the employee how they can improve, tells them who on the team they should kind of, you know, get mentored by. It encourages them when they're not doing very well in projects or they fall behind in efficiency. It encourages them when they get above base pay for their first paycheck. It. It's kind of like what you want to say sometimes but don't, don't want to as a manager and you can't. The app does that for you and we're going to be integrating a whole bunch of really cool gamification side of things and like where they can get tokens and rewards for things like being on time etc. In the P4P app.

I have enjoyed your business advice. I'm trying to apply the principles in the tree care industry. I find most of the things are interchangeable but some are not. The biggest difference is the financial barrier to entrance in this. In into this industry. Yep, almost every single business that sells any sort of labor can use 99% of what I talk about. But yeah, there's definitely a little more commitment in terms of certifications and financial upfront when it comes to tree service compared to mowing.

Are there, are there any all electric mowers, setups, etc that you can recommend thoughts on it as a business and is there a demand for it? I think there's demand for it. I just don't think people are willing to pay a premium for it there. You know, there's very few in their municipalities and cities that are required to or potentially like Fortune 500 companies that want to just like be able to say that we have electric mowers mowing our campus and you know, in universities, things like that. But I don't think there's a huge market for it yet in terms of people willing to pay extra. Like no one's willing to pay an extra dollar for it. And so until the cost of the equipment makes more sense, I'm not like jumping all over because guess what? If it's going to be the next thing, which I do believe it will be in 10, 20 years, I'll go down to the store and I'll go buy some. So why would I jump on now? I'll just be able to go buy it. It's not like software that takes years to build and I need to get integrated and I need to understand and diagnose and debug things. It's like if it's taking over the world, I will go down to my dealer and I'll go buy a bunch. So I'm not too concerned about electric motors and like getting on board before everyone else does or anything like that. What's your opinion on paying someone 10k plus for a total rebrand of a business, has been established for seven years, is well known in the local area. I would like to start in a location 40 miles down the road in a larger city. So far we just have a name and logo, but no mascot or truck wraps, just signage on trailer. This is coming from someone who's very biased because I see design pretty easily. $10,000 for a rebrand when they're probably going to give you a logo and some mock ups for like your truck decals and your uniforms. Personally I think that's crazy.

But if you don't see and like, if you can't tell what color palettes work well together and you can't make sense of what's going to look well on a design for a truck, et cetera, it might make sense, but I do not think $10,000 and required to do that. Personal opinion. And if you have a $10 million business, maybe you can make sense of that. I've just seen plenty of those businesses do their rebrands and they spend meetings and countless hours and tens of thousands of dollars and like that could have been done in an hour with a designer for a couple hundred bucks. It really could have been. And honestly, if you have like a uniform provider, if you have a company that does decals for trucks, they will help you with the design. You're really just needing a logo and a color palette and fonts. If you have that, you can, you know, a lot of times the person who makes your uniforms Will help you design the uniforms. The person that does truck decals, they'll help you do those. So I would not worry about it too much. I think 10k is a little crazy unless you have money to burn. So how's this? How far? Good, good. Chandler still working there? Cranking along. I think he has two employees. At least I remember. How do you get. How do you get people to pay the credit card? What arguments are negotiating taxes to use? Honestly, I don't think negotiation is something you want to use when it comes to requiring a credit card file. So what we're doing is with.

With Copilot is we're gonna make an option for it to be required just to accept the estimate and make it just part of the process. Like, it's just part of the process. It's like, oh, click accept on the estimate. Oh, card is required on file in order to accept this estimate. Great. Here's the form. Boom. Fill it out. Bam. That saved their profile. Easy stuff. Easy peasy. I would not worry about negotiation tactics. People use their credit card for a lot of things. They have their card on file for the utilities and for their Internet and for their garbage and all the other stuff. So I would just not overthink it and I would get a card and file. Hey, Mike, have you ever been had pushback from customers? They get a stripe processing fee so their price is higher than the estimate.

We don't do this. I don't recommend it. We do have the option inside of Copilot to charge the processing fees to the customer. And I know probably about 10 to 15% of users inside of Copilot do charge processing fees back to the customer. I personally don't recommend doing. So I just raise my prices and get them covered so they don't. They don't have to see it. And it's always the same price on their end. And there's not like weird numbers, but that's just me. I'd rather raise my prices by 10% and cover the cost of the 3% extra on processing fees.

So we ended up signing up for Copilot but realized we imported the wrong CRM. Did you know there's us another one that's similar? Yeah. So we. We started Copilot. Serum.com. there is another site called Copilot. It is a CRM for like tech companies. It has a green logo. It looks very much like Chat GPT.

It is unfortunate and that that when November rolled around, Chat GPT came out. Anything related to Copilot got. Got like sucked up in terms of URLs and trademarks and all the rest of it. We already had Copilot CRM so I know it's unfortunate. I apologize. This is what I would say if you're looking for Copilot CRM, scroll down. You'll see my face. You'll see a lot of stuff to do with me on there. You'll see a note from me, you'll see videos about it and as you sign up in the signup process, like my videos are in there, it'll be very apparent. So yeah, sorry about that. A couple people have mentioned that it's another CRM that has nothing to do with like home services.

It's more for like tech side of things.

Curtis Mike, you've been inspiration for my jump into the industry. First full year down and we're showing awesome growth. You probably get this all the time but when you first kicked off what is something you now you know now that you wish you knew about? Then I would say just how price elastic our customers are if they if you're able to keep them happy. So if you can track your attrition and just make sure you're not losing customers due to bad customer service, you'd be amazed at how how much more you can raise your prices and be much more profitable. What are the chances you go on a run with me entirely in Marcus before summit one morning? Probably not happening this this summit. Sorry. I have eight keynotes and I am going to be I want to make them the best keynotes I've ever taught given and I'm going to be testing several things on what works and what doesn't in my keynotes and I want I I feel obligated to make sure that 100% of my time is making sure that those eight talks are the best ever. If you want to do a one on one with you can you provide all the information we should have readily available to discuss? If you're gonna do a one on one you can go I think it's mikeannie.com coach I'd recommend just calling in. I can answer your questions but if it's personal I understand. If you're doing an acquisition or something like it's a messy divorce or something, I'm happy to help. We can go there. And in terms of what you should bring as much as you can in terms of financials and lots of good questions written down and being repaired that's probably you're going to get your most out of it. What's and I Think. I think I cancel. I paused them for a while during the summer, but there it's back available. I think I allow two, two a month. Now. What's the best way to go about raising your prices? Also, when raising prices, what is a good price increase percentage? Some people say raise your prices 10% until you lose 20% of your customers. I'm a big fan of raising prices based on capacity.

Who does your shirt? We have one of the franchisees. We have a couple franchisees at Augusta that do shirts and kind of all our swag. Do you think it's worthwhile to obtain a business loan given the current interest rates, or would it be better to wait for a few years? I'd rather do a line of credit and not use it in this environment. The credit rates are insane. It's a big reason why I'm selling my real estate to.

Build the headquarter building because the SBA is going to charge me 8 to 10% for interest. I don't want to be doing that on over $3 million. So. Yeah.

Also I've switched to Copilot from Jobber and the software is awesome. Thanks again, Mike, for your genius software and advice. Thank you. I appreciate it very much. Great show and great advice. Thanks for taking time to do it. Very helpful. We'll get a ticket summit. Get it today. Get it today. And if you can come to the hotel, that'd be very cool as well. It's always. It's pricey. I don't like it. I don't like it. But the Omni Hotel is really, really nice. If you can split a hotel with someone or whatever, being the hotel is good. Especially if you've, if you're, you know, if you've never been to a conference or you don't have a lot of networking, a lot of other people that like that, you know, in the industry. I would recommend staying at the hotel. I know it's pricey. I'm sorry. It's the only hotel I could get in all of Louisville for that, those couple days. So I would recommend being at the hotel, talking to people out in the, in the, in the hallways, talking to people outside of breakfast and dinners and lunches, etc, it's very, very valuable. Seven years in, Mike, we keep being grateful for your advice. Thank you. From Florida. Awesome. All right, everyone, have a fantastic weekend. I appreciate you all being here live. Thank you for the people that called in. You guys are always awesome calling in. I really do appreciate it. Make sure you do book your tickets. Mikeannies.com summit. My goal is to make these the best talks I've ever given in the next five weeks until conference. I. Well, it's six weeks almost. But next week I'm traveling for to do another turnaround video, which you will see in a couple weeks. But.

I want to make these. These, like my best presentations ever. I'm spending gobs amount of time on them this time. Usually I'm pretty good about fasting my feet and, like, I can just go through my slides and kind of know what I'm going to talk about in terms this year I'm spending a lot of time. I'm going to spend basically the five weeks after next week's trip to. I'm going to spend every single day working on them. So I hope you can come and I don't think you'll be disappointed. All right, guys, we'll see you tomorrow. Oh, see you tomorrow. Sorry. I'll see you sometime soon. Maybe in a couple weeks I'll do another live stream. All right, guys, take care. Have a good one.

Thank you to everybody who stayed till the end of today's Q and A session. Be sure to tune into our next episode. We're going to put out a C suite unfiltered with Mike and Lee. Take care, everybody. Have a nice evening.