Mike Andes built Augusta Lawn Care into a multi-million-dollar business and breaks down his seven-stage framework: hit $500K revenue, lock in profit with a two-month cash cushion, systemize so you work on the business not in it, scale to $800K, hire a GM, replicate locations, then diversify. The stages matter in order. Skip them and you stay broke.
Questions this episode answers
June 17, 2024.
Over 150 locations around the world.
$500,000 in annual revenue.
Two months' worth of payroll in the bank.
About $800,000 in annual revenue.
Chapters
Today we're going to go through a seven step process to go from being broke all the way to building a multi million dollar, multi location home service business. My name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations around the world. And today I'm walking you through what we actually use at Augusta Nation. It's called the seven stages of wealth at Augusta Nation. Let's start with the very first one. And the very first stage of wealth is to grow your business past $500,000 in annual revenue. Now, you might be saying that $500,000 in annual revenue is big, and it is, especially if you're starting at zero. But this is the thing. Once you pass $500,000 in annual revenue, we see a massive drop in how many people just throw in the towel and give up. Once you pass $500,000, you actually start to see some progress in the business. Before that, it's very difficult to see any sort of track record or, or you have nothing to point to in terms of evidence of success. Once you build it past 500,000, okay, it's hard, but at least I can see I've built something that's cool and I have employees and we have a real business now. So the very first stage is just grow the business. Which might mean that you might spend years, 2, 3, 4, 5 years just building to this stage. And that's why most people never get there. It's very demoralizing because you haven't even gotten past the first stage of wealth. But this is the important part about the seven stages of wealth. You got to do them in order. In my opinion, it's the most secure and the most efficient way to make yourself wealthy. Because if you're in stage one and you're growing a 300,000 annual revenue business and you skip down to stage number six, which is creating multiple locations, we're going to have a problem and you're probably going to lose time, money and you're probably going to lose your hair due to stress, which is already happening. Fantastic. The second stage is profit. In the stage of profit, we're going to try to get two months worth of payroll in the bank as a little bit of a cushion. Because until this point, you've probably been buying more trucks, buying more equipment, hiring more people just to get past 500,000. But at this stage, let's slow down for a little bit. Maybe take six months a year and just raise prices, increase your profit margin, increase the amount of money that you have. In the bank. So you're not scraping by. Then we need to move into profit. Because if you just focus on growth all the time, this is why massive companies go out of business is because they're just stuck in growth mode. Get out of stage one, focus on profit. That's stage two. Which stage is your favorite stage of all profit?
Stage three is systems. Keep in mind you're still working in the business, you're just working out of the field. So doing sales, admin, anything besides actually doing the work, that's stage three. And in order for that to happen, you're gonna have to create systems and simplify and standardize so you can actually make the business continue growing it to stage four, which is 800,000 in annual revenue. Now sometimes people will start a second location because they like to keep their revenue around 6, 700,000. I like that premise, but I still gotta get past gross revenue of 800,000. I'm gonna scale. Keep in mind I didn't go from stage one to stage four, which means after I hit 500,000 annual revenue, I took some time, made it profitable and systematized it again. I'm just worried about your life expectancy and the fact that I want you to stay in business. Number five is the fact that we are going to have a general manager. We're gonna hire a general manager and get out of daily operations. So not only are you just gonna be not in the field anymore, you're not gonna be needed at the business at all on a daily basis. That means hiring, firing and sales is gonna be given off to a general manager. This general manager is now responsible for the output and the numbers and the metrics of this entire location. This person now is going to be the person that when an employee calls out in the morning, they're contacting the general manager. They're not contacting you Once you've done this and you've actually got a general manager and they're profitable at this location, maybe 7, 800,000 annual revenue, even 600,000, you can make it work. You can't do a 200, $250,000 annual revenue business and think you're gonna have a general manager in place and you never have to touch it and you're completely out of daily operations. It's not going to be profitable. Alright, Stage number six is repeat rep. That is where we're gonna copy and paste our location and what we've created over and over again. We're not gonna abandon the thing that's doing well. That's what we call shiny object syndrome. You're like, I'm gonna do real estate. I'm gonna go do rental cars. I'm gonna go do turo. Like, all these random things that, yes, you could do them, and yes, you can make money doing them. But if you've gotten through the first five stages and you have a successful business that runs without you outside of daily operations, why not just copy and paste it? Why not just do it again, figure out what works, and do the same thing over and over and over again, and you'll become a millionaire. If you want to become a billionaire, yeah, you probably got to do different stuff. But we're just trying to make a lot of money. If I made $100 million, I'd be happy. I bet most people in here would be pretty happy, too. So I'm going to copy and paste. Now, the seventh stage of wealth is what we call the invest phase. This is where, if you want, you can get out of your industry and go start other stuff. Do it not because you want to make more money, but because you're interested in it. If you're like, I really love cars, I'm going to go start an automotive company, great. But realize that if you would have stayed in stage six and just copied and paste your home service business and did multiple locations with more general managers, you'd probably make more money. But doing the automotive thing, you're passionate about it. Great. You have money to go do that now. You've created the financial pillar of of your home service business to go play and do your automotive thing. Also, another reason to invest, and what we talk about a lot inside the masterminds at Augusta Nation is diversifying into other asset classes like stocks and real estate. Those are things that you will be able to also get a lot of tax benefits and save all of your good profits from your business and save it from going to Uncle Sam. There's definitely more tax advantageous ways to use real estate and invest in things other than your home service business. As you get to stage seven, the reason we put these stages of wealth for Augusta Nation is because if you're at stage one, you should not be focused on stage six and seven. Far too often. We read a book about real estate. I'm gonna go get myself a duplex. And if you'd spend that $50,000 that you spent on that and the weeks and months of rehabbing it and fixing it up and trying to flip it and all the rest of it, and yeah, you made an extra 20 or 30 thousand dollars. If you spent that on your business, you would have much greater returns. And so doing the stages of wealth in sequence will lead to the most predictable and greatest outcomes, in my opinion. And honestly, a lot of billionaires won't even get to stage seven of wealth. They'll just doing the same thing over and over and stay in stage number six. Stage seven is really optional because someone like Panda Express, their owners, they have over 2,400 locations and they have a net worth of $3 billion. How did they do it? They 40 years ago started Panda Express and just kept doing one location after the next after the next after the next. And that is stage six. And if you want the roadmap to do that for your first six locations, watch this video here where I break down the budget and exactly how to do your first six locations and become a multi unit operator.
